Will Nasdaq 100 index sustain its rebound amid persistent short-term selling pressure?

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Nasdaq 100 rises 1.74% to 27,106

Highlights

The Nasdaq-100 Index suffered its steepest single-day decline since March 2020, erasing about 2,300,000,000,000 in market value.
Market participants sold technology names on concerns about stricter U.S. technology and AI regulation after a Democratic Congressional sweep.
Technical signals show ongoing bearish pressure below major averages, with resistance at 27,718 and an expected range of 26,354 to 27,597 for the next several days.

Regulatory risk triggers broad selloff as Democratic sweep drives sentiment

The Nasdaq-100 Index recently suffered its sharpest single-day drop since March 2020, a move attributed to heightened concerns over tighter U.S. technology and AI regulation after a Democratic sweep in Congress, according to Tickmill and FXStreet. This development has raised the perceived regulatory risk for leading technology names within the index, prompting significant selling by investors seeking to manage exposure to potential policy headwinds. In response, the index erased approximately $2.3 trillion in market value in a broad correction, as reported by FXStreet, underscoring the impact of shifting regulatory expectations on market sentiment.

Momentum signals remain bearish as oversold readings invite rebound risk

NDX/USD is currently situated below the MA-20 at 27,787 and MA-50 at 28,339 on the hourly chart, and also remains under the MA-200 at 27,976 on the daily timeframe. Price action faces immediate resistance at the Ichimoku Kijun level of 27,718, while momentum indicators—including MACD and ADX—continue to generate sell signals. RSI, Stochastic RSI, and CCI are each parked in their oversold zones, reflecting selling exhaustion that could precede a technical rebound. Bull/Bear Power registers –643.31, highlighting strong intraday seller dominance, while the Awesome Oscillator is currently neutral and does not favor either direction.

Downside probability dominates as price consolidates near support

Over the next two to three trading days, NDX is expected to consolidate within the 26,354 to 27,597 volatility band relative to current levels. The probability of sustained upside movement remains very low, while the likelihood of further downside dominates, making a swift reversal unlikely in the short term. The baseline scenario envisions price holding within this consolidation range, with a bullish shift requiring a decisive breakout above 27,718. Should NDX fall below 26,354, renewed bearish momentum could accelerate losses through additional support levels.

Anton Kharitonov, expert at Traders Union, believes the Nasdaq-100 remains under heavy technical and sentiment pressure after its sharp regulatory-driven correction. Despite some signs of selling exhaustion, he sees little evidence for a strong near-term recovery while the index trades below key resistance at 27,718. Risks tied to heightened regulation continue to limit upside probability. "Base case is consolidation, with bears controlling momentum until 27,718 is broken decisively."

Earlier, analysts noted that the Nasdaq 100's sharp downturn was driven by fears of increased technology and AI regulation following a Democratic sweep in Congress, resulting in significant market capitalization losses across leading tech names. The current technical landscape suggests downside risks remain elevated, making sustained recovery contingent on a decisive break above established resistance levels.

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.