The NASDAQ index initially rose, reaching 19,644.23 before declining to 19,423, down 100 points or 0.52%. This downturn occurred after failing to surpass the broken 200-hour moving average at 19,661.80.
Currently, the low from last week at 19,415.48 is being tested. If this level is breached, there could be additional downward momentum.
The trading range spanning back to November 21 has a low of 18,831 and a high of 20,204.58, representing a potential 6.74% decline from December’s all-time high.
Nvidia will announce earnings after the close on Wednesday, with shares up 0.24%. Conversely, Palantir shares are down 9.19%, currently testing the 200-hour moving average.
The drop in the NASDAQ index highlights a shift in momentum, with a retreat from earlier gains as selling pressure picked up near the 200-hour moving average. The attempt to reclaim that level at 19,661.80 was short-lived, creating a point of resistance that traders should now factor into their decisions. With the index already testing last week’s low, any decisive break lower could lead to an extended decline.
Looking at the broader range established since late November, the potential downside remains measurable. A full retracement to November’s lows would represent a loss exceeding 800 points from current levels. While such a move wouldn’t erase the longer-term uptrend, it would reinforce the idea that upward momentum is becoming increasingly difficult to sustain without clearer catalysts.
Market participants are keeping an eye on Nvidia’s earnings, given its influence on sentiment, particularly within the technology sector. The stock’s modest rise ahead of results suggests tempered expectations. Any surprise in revenue or outlook could have a ripple effect, influencing broader sentiment beyond just semiconductors.
Meanwhile, Palantir’s decline brings it close to technical support at the 200-hour moving average. The reaction around this level will be worth following, as a sustained drop below could invite additional selling. The speed of this pullback raises the question of whether recent gains were overextended, making the stock susceptible to further volatility.
This week’s price action underscores the importance of identifying critical thresholds. Rejections at resistance, coupled with declines toward key support levels, suggest that markets are in a phase where both buyers and sellers are testing conviction. Momentum traders, in particular, should remain mindful of whether price movements are sustaining follow-through or stalling near well-watched levels.
Beyond just index movements, the reactions to earnings reports in the coming sessions may provide further clarity. Nvidia’s results could either alleviate concerns or add to the downside risks that have emerged over the past few days. At the same time, stocks already under pressure, such as Palantir, will need to show stability at technical levels to avoid further selling pressure.
