Nasdaq 100 Weekly Market Insights - Week of February 24th

Market Analysis for Nasdaq 100 for the Week of February 24th, 2025

Overview:

The Nasdaq 100 has been a standout performer in early 2025, propelled by robust growth in technology, particularly AI, semiconductors, and cloud computing sectors. As we approach the week of February 24th, the index is testing significant resistance levels, suggesting a potential turning point. High valuations, policy expectations under the Trump administration, and upcoming economic data could drive either a breakout to new highs or a correction.

Technical Analysis:

• Nasdaq Futures (NQ_F) Key Price Levels:

  • Resistance Levels:

    • 22,600 (major resistance, where recent highs have been challenged)

    • 22,450

    • 22,300

  • Support Levels: 

    • 22,150 (key support, where recent consolidation might hold)

    • 22,000

    • 21,850

    • 21,700 (potential for a deeper correction if breached)

  • Pivots: 

    • Daily Pivot around 22,375, acting as a midpoint for potential market swings this week.

  
  

  The Nasdaq 100 has been in a bullish trend but is now encountering resistance at 22,600, with the RSI potentially indicating overbought conditions. This could lead to a correction if buying momentum weakens, especially if volume trends show reduced participation at these highs.

  
  

• Elliott Wave & Trend Analysis:

  • The index might be in the latter stages of a bullish wave, with a breakout above 22,600 potentially signaling the start of a new upward leg. However, failure to break this level could initiate a corrective wave, testing lower supports as profit-taking or valuation concerns emerge.

Fundamental Outlook:

• Tech Sector Earnings and AI Developments: 

  • Earnings from tech giants have been a major driver, but any signs of slowing growth or weaker guidance could prompt a reassessment of valuations. AI and semiconductor innovations remain key focal points.

• Policy Influence: 

  • Policy announcements related to technology, such as AI infrastructure investments or regulatory changes, could significantly impact the index. Investors are watching for tech-focused policy shifts from the administration.

• Market Sentiment: 

  • Posts found on X reflect a market with high expectations but growing concerns about overvaluation, with some traders anticipating a push toward 23,000 if resistance breaks, while others highlight support around 21,800-22,000 as critical areas to watch.

Options Chain Data for QQQ ETF:

• Call Options: 

  • High open interest at strike prices of 555 and 560, indicating expectations of a potential rally beyond current levels if bullish catalysts emerge. This aligns with X sentiment suggesting targets around 23,000 for NQ_F.

  • Recent posts note a weekly high estimate of 532, suggesting these calls might be positioned for a breakout.

• Put Options: 

  • Significant open interest at 535 and 530, aligning with the weekly low estimate, suggesting these could be key support areas where investors might look to buy dips or protect positions. This matches X posts noting 518-526 as a neutral range.

• Volatility: 

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

Conclusion:

For the week of February 24th, 2025, the Nasdaq 100 is at a pivotal resistance level of 22,600. Breaking this could lead to further gains, potentially pushing toward 23,000, driven by strong tech performance or favorable policy developments. However, if resistance holds, a correction toward support levels, particularly 22,150 or lower, could occur, especially if negative news emerges or profit-taking intensifies. The options market for QQQ reflects this uncertainty, with balanced interest in both bullish and bearish escenarios, suggesting investors are prepared for various outcomes. Monitoring these technical levels, alongside fundamental developments, will be crucial for navigating this week's market dynamics.