Nasdaq 100 drops nearly 2% after trading below short- and medium-term averages

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Nasdaq 100 slides 1.6% to 29,222

Highlights

BlackRock's launch of a low-cost iShares Nasdaq-100 ETF intensifies competition among passive products and is expected to boost index inflows.
SpaceX's addition to the Nasdaq 100 triggered $4.3 billion in index fund rebalancing flows, reflecting a major structural change.
Technical indicators show strong short- and medium-term selling pressure, with NDX likely to range between 29,000 and 29,660 and limited upside probability.

Product launches and index reshuffles as passive flows reshape demand

BlackRock has launched the iShares Nasdaq-100 ETF, offering a new low-cost way for investors to gain exposure to the Nasdaq 100 Index, according to Moneycontrol. This move introduces added competition among passive index products and is likely to drive new inflows into the index over time. Separately, Techtimes reported that SpaceX entered the Nasdaq 100 under ticker SPCX following a 'Fast Entry' rule change, which led to approximately $4.3 billion in passive index fund purchases as required rebalancing took effect. These developments represent structural changes in index composition and tracking flows, though price action has remained under broader selling pressure.

Broad technical weakness as selling pressure meets long-term support

On the hourly chart, NDX is positioned below both the 20-period (29,572) and 50-period (29,668) moving averages, indicating near-term and intermediate-term resistance. However, the index continues to hold above the daily 200-period moving average at 26,119. Immediate resistance is identified at the Ichimoku Kijun level of 29,681, while short-term support is set at 29,000. Technical indicators remain negative: the Moving Average Convergence Divergence (MACD) signals a Sell, the Commodity Channel Index (CCI) and Relative Strength Index (RSI) are also on Sell with RSI registering at 34.97, and Bull/Bear Power shows clear seller dominance. The Average Directional Index (ADX) is Neutral, as is the Stochastic RSI. The Awesome Oscillator aligns with ongoing selling momentum, while low volatility continues to characterize day-to-day movement. A gap down at the open contributed to the current session’s decline.

Persistent bearish bias as downside breakout risks intensify

Looking ahead to the next several trading days, the expected range for NDX is between 29,000 and 29,660, a typical volatility band relative to current levels. Scenarios favor a further decline, with the probability of a downward move described as very high, whereas odds of an upward reversal are minimal in the current context. The baseline expectation is for the index to consolidate within this corridor. A bullish scenario would require a decisive breakout above 29,681 resistance, while a move below the 29,000 support would likely trigger an extension of recent losses.

Viktoras Karapetjanc, expert at Traders Union, sees the Nasdaq 100 under pressure despite notable moves from major institutional players. He notes that BlackRock’s new ETF launch and SpaceX's fast entry represent a long-term vote of confidence in the index, likely supporting incremental inflows and structural stability. However, he expects lingering market sellers to dominate in the near term, with price action contained below key resistance. "While technicals suggest further weakness, institutional engagement and ongoing inflows point to an improving macro backdrop for the Nasdaq 100 going forward," says Karapetjanc.

Earlier, analysts noted that bullish conditions in the Nasdaq 100 were tempered by conflicting technical signals and the risk of volatility from index rebalancing. With the recent downside shift in momentum and substantial inflows from passive funds following structural changes, traders should now monitor for a potential breakdown below the 29,000 support level as the primary risk in the near term.

Source of Data: NDX Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.