NASDAQ100 Stuck In Range, All Eyes On FED Meeting

NASDAQ100 suffered a steep loss with a massive 63 issues declining while only 45 issues recorded slight gains.

Tesla Motors Inc topped the list of the day’s best performance among NASDAQ 100 shares, inching up 6.2% from the last settlement, the biggest increase since February. This was brought about by investor Ron Baron’s forecast that the company will become one of the biggest companies in the upcoming decade. Additionally, thanks to investor expectations for a modest rebound in hard drive sales, shares of Western Digital Cp ticked up 3.58% from their previous close.

Nevertheless, the 2.5% slump in the biotech index, the steepest daily drop since May 11, outweighed the upbeat stocks, dragging the NASDAQ 100 shares into negative territory.

The worst performing NASDAQ 100 component on the day was Biogen Inc. (BIIB), with shares trading down 12.76% to $252.81. The slide in the biotechnology company’s stock was caused by the recent failure of its new experimental drugs in improving the health of multiple sclerosis patients.

Another NASDAQ 100 component making a significant down-move was Alexion Pharmaceuticals Inc. After the company announced on Monday (6/6) that its Soliris drug to treat a rare neuromuscular disease could not meet its primary goal in clinical trials, its shares slipped by 10.88% to $137.84.

Along with an unstable economy, and pessimistic data from the labor market, the risks being taken with new experimental drugs within the bio-tech sector seem to have frayed investor nerves and driven them away from NASDAQ 100 companies.

The dollar index, which tracks the value of the greenback against a basket of currencies, continues to hover around a one-month low of 93.73 after the NFP report for May was released on Friday. Despite the FED President stating on Monday that the central bank is still on course with its plan to increase interest rates this year, markets are pricing very low odds of an increase in rates in June or July.

ndx d1

Fig. NASDAQ100 D1 Technical Chart

NASDAQ100 has been moving in a narrow range between 4475.75 and 4546.11 since the end of May. Two moving averages, which lie under the price chart, still support the index by acting as support areas below. The price is expected to resume its up-move as indicated by the trend indicator, after spending some time consolidating. The level 38.2% of Fibonacci retracement is acting like a solid support for the price.

Trade suggestion

Buy stop at 4554.98, Take profit at 4579.85, Stop loss at 4526.56

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