Nasdaq expected to consolidate in near term
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AS THE Nasdaq 100 entered the second quarter of 2026, it staged a sharp rebound from its March lows, reversing part of the earlier weakness triggered by heightened geopolitical tensions linked to US-Iran developments. The recovery has been largely driven by improving sentiment as markets responded positively to ceasefire talks and easing tensions, prompting a relief rally after the prior sell-off.
From a technical perspective, the rebound has resulted in a break above the downward channel that had guided price action from January to early April 2026. The move marks an important shift in short-term structure, with the index now trading at levels last seen in February 2026. Notably, the magnitude of the current rebound from March to April closely mirrors the earlier recovery observed between November 2025 and January 2026, suggesting a repeat of strong counter-trend buying following sharp corrections.
Despite this improvement in sentiment, the Nasdaq 100 is now approaching a cluster of key resistance levels. The index is currently trading near the 100-day Simple Moving Average (SMA), which has acted as a consistent resistance level since the breakdown in February 2026. This area coincides closely with the 100 per cent Fibonacci extension level at around 25,150, reinforcing it as a critical near-term ceiling.
A sustained move above this level would be required to confirm further bullish continuation. Beyond this, the next major resistance zone lies between 26,030 and 26,180, which aligns with the 138.2 per cent Fibonacci extension and the previously established double top region from late 2025 and early 2026. This zone remains structurally significant and is likely to attract selling pressure in the absence of a strong breakout catalyst.
On the downside, if the index fails to clear the immediate resistance near 25,150, the first support zone is expected between 24,260 and 24,400, where short-term price consolidation previously occurred. A deeper pullback could see the index test the next support region between 23,720 and 23,870, which corresponds to the 38.2 per cent Fibonacci retracement level and serves as a key technical floor within the current recovery structure.
From a broader perspective, while the break above the bearish channel signals improving momentum, the overall trend remains in a transition phase. The presence of overhead resistance from both the 100-day SMA and the double top region suggests that bullish momentum may face limitations in the near term. At the same time, the successful defence of higher lows following the March rebound indicates that selling pressure has eased compared to earlier in the year.
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As a result, the Nasdaq 100 may enter a sideways consolidation phase, as the market digests recent gains and awaits a clearer directional catalyst. This range-bound behaviour would likely be defined by resistance near 25,150 and support between 24,260 and 23,720, with a breakout on either side setting the tone for the next major move.
In summary, the Nasdaq 100 has regained some technical strength heading into 2Q 2026 after rebounding from geopolitical-driven lows and breaking above its short-term downtrend. However, with key resistance levels now in focus and broader structural hurdles still intact, the index is likely to consolidate in the near term before determining its next directional trend.
The writer is manager of dealing and investor education at Phillip Securities
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