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American Stock Market is Preparing for a Reversal

2/14/2023 1:07 PM

One of the leading US indices Nasdaq 100 is showing corrective dynamics, being at 12480.0 in anticipation of the publication of corporate reports. To date, financial indicators for the fourth quarter of 2022 have been presented by more than 75% of major market players, recording an increase of 1.1% compared to analysts' forecasts.

Today, the attention of investors will be drawn to the data of the market leader in the production of soft drinks The Coca-Cola Co., and tomorrow the report of Cisco Systems Inc. will be released, preliminary estimates of which are rather restrained: revenue may amount to 13.41 billion dollars, which is slightly lower than 13.60 billion dollars recorded in the quarter earlier, and earnings per share may be 0.854 dollars compared to 0.860 dollars shown in the previous period.

The pressure on the Nasdaq 100 quotes is now being exerted by fears of the continuation of the "hawkish" course of monetary policy by the US Federal Reserve, aimed at fighting inflation. Experts suggest that the interest rate may exceed 5.00%, and futures indicate that by August the figure will be adjusted to 5.20% per annum. In this case, the positions of stock indicators will be under even more serious pressure.

The growth leaders in the index are Airbnb Inc. (+6.93%), Warner Bros Discovery Inc. (+4.99%), PDD Holdings Inc. (+3.95%), Netflix Inc. (+3.23%).

Among the leaders of the decline are PayPal Holdings Inc. (−1.67%), Tesla Inc. (−1.14%), Diamondback Energy Inc. (−0.71%), Baker Hughes Co. (−0.43%).

On the daily chart, the Nasdaq 100 quotes are correcting as part of the global Expanding Formation pattern, approaching the resistance line.

Technical indicators are holding a buy signal, which started to weaken: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is forming new descending bars trading in the buy zone.

Support levels: 12200.0, 11600.0. | Resistance levels: 12700.0, 13600.0.

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