Nasdaq 100 Weekly Market Insights - Week of February 17th

Market Analysis for Nasdaq 100 for the Week of February 17th, 2025

Overview:

The Nasdaq 100 has been a standout performer in early 2025, driven by the tech sector's strength, particularly in AI, semiconductors, and cloud computing. However, as we approach the week of February 17th, the index is encountering significant resistance, suggesting a potential pause or correction amid high valuations and expectations for tech-related policy changes under the Trump administration.

Technical Analysis:

• Nasdaq Futures (NQ_F) Key Price Levels:

  • Resistance Levels:

    • 22,500 (major resistance, where recent highs have been tested)

    • 22,350

    • 22,200

  • Support Levels: 

    • 22,000 (key support, recent consolidation area)

    • 21,850

    • 21,700

    • 21,550 (potential for a deeper correction if breached)

  • Pivots: 

    • Daily Pivot around 22,250, serving as a midpoint for potential market swings this week.

  
  

  The NQ_F has shown signs of stalling at these resistance levels, with the RSI indicating overbought conditions, which could lead to a correction if bullish momentum doesn't persist. Volume trends suggest a reduction in buying pressure at these highs.

  
  

• Elliott Wave & Trend Analysis:

  • The Nasdaq 100 might be in a wave 4 correction within a larger bullish trend. A break above 22,500 could signal the start of wave 5, while a failure to break resistance might extend the corrective phase.

Fundamental Outlook:

• Tech Sector Earnings and AI Developments: 

  • Earnings from tech giants and continued advancements in AI and tech sectors are key drivers, but there's caution about sustainability at current valuations.

• Policy Influence: 

  • The market is sensitive to policy announcements, particularly those related to technology, such as AI infrastructure investments or regulatory changes. These could either propel the index higher or lead to profit-taking.

• Market Sentiment: 

  • Posts found on X reflect a market with high expectations but also concerns about overvaluation, with some traders anticipating breakouts and others preparing for potential corrections.

Options Chain Data for QQQ ETF:

• Call Options: 

  • High open interest at strike prices of 550 and 555, indicating expectations of a potential rally beyond current levels if sentiment remains bullish or if positive news emerges.

  • The weekly high estimate of 532 from recent posts suggests these calls might be in anticipation of a new high.

• Put Options: 

  • Significant open interest at 530 and 525, aligning with the weekly low estimate, suggesting these could be key support areas where investors are looking to buy dips or protect positions.

  • The neutral range of 518-526 observed in recent posts indicates where much of the market might expect trading to hover.

• Volatility: 

  • The QQQ has shown increased implied volatility, indicating that traders are preparing for potential volatility, especially ahead of key earnings or policy announcements.

Conclusion:

For the week of February 17th, 2025, the Nasdaq 100 is at a critical juncture with resistance at 22,500. A break above this level could lead to further gains, potentially driven by strong tech earnings or favorable policy developments. However, if the index fails to break this resistance, we might see a correction back to support levels, especially if there's negative news or if broader market sentiment shifts. The options market for QQQ shows a balanced approach, with interest in both bullish and bearish scenarios, suggesting investors are prepared for various outcomes. Monitoring these technical levels, alongside fundamental developments, will be essential for navigating this week's market dynamics.