Nasdaq (US Tech 100) News and AnalysisNetflix and Tesla kickstart Q1 megacap tech earningsNasdaq 100 reveals clear hurdle to bullish continuation whi
Nasdaq (US Tech 100) News and Analysis
- Netflix and Tesla kickstart Q1 megacap tech earnings
- Nasdaq 100 reveals clear hurdle to bullish continuation while the RSI highlights risks of a short-term pullback. Ultimately, earnings will have a say on the future direction
- The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library
Netflix and Tesla Kickstart Q1 Megacap Tech Earnings
Later this evening Netflix reports its latest earnings update, marking the first of the megacap stocks to do so. Then tomorrow, it will be the turn of Tesla with both announcements scheduled to happen after market close on their respective days. For easy, customizable access to the latest earnings results take a look at DailyFX’s new earnings calendar.
Customize and filter live earnings data via our DailyFX earnings calendar
Meta, Tesla and Nvidia Post Impressive Start to 2023
In a broader US equity analysis, tech stocks have been driving indices like the S&P 500 higher while the remaining stocks in general have found it difficult to catch up. The chart below isolates tech stocks’ share price performance for 2023 thus far which sees three standout performers in Meta, Nvidia and Tesla. Tesla’s earnings and forward guidance is likely to have an effect on the index given its prominence and roughly 50% surge this year.
Netflix, however, despite a respectable 12.8% appreciation year-to-date has not fared quite as well this year with revenue expected to beat the Q4 print but profitability is expected to take a hit with analysts anticipating an EPS drop to $2.86 from $3.53.
Tech Stocks Performance Year-to-Date
Source: Refinitiv, prepared by Richard Snow
Clear Hurdle for Nasdaq Bulls Lies Ahead, Earnings Likely to Guide Direction
Earnings season is set to have an impact on equity markets as the index is a function of share prices and share prices are influenced by the future economic environment. Therefore, markets will remain focused on the current earnings report but will also keep a keen eye on forward guidance surrounding the economic outlook and tightening financial conditions – which typically doesn’t favour growth stocks.
Looking at the daily chart, the clear barrier to the bullish continuation emerges via the recent high of 13.350, where an upside completion of the bullish flag pattern suggests prices upwards of 14,400.
For now, the recent price compression between 12,950 and 13,350 may be symptomatic of the index losing momentum, opening the door to a short-term pullback. Another supporting factor for a possible bearish pullback is the negative divergence which has appeared on the RSI – highlighting a lower high on the indicator while prices achieved a higher high. Support currently lies at 12.950 with a sizeable move needed to reach the next significant level of 12,250.
Nasdaq 100 Index Daily Chart
Source: TradingView, prepared by Richard Snow
— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
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