U.S. stock market extends gains for eight consecutive days as China-US trade tension relieves since both sides were willing to keep negotiating after a meeting in Beijing earlier this month. The Nasdaq 100 index surged on Monday after President Trump’s conciliatory move to help Chinese telecom equipment maker ZTE Corp. get back into business fast.
However, the index pared early gains in thin trading as Commerce Secretary Wilbur Ross said the U.S. is seeking for alternatives to punish China’s ZTE Corp. for breaking sanctions law separately from trade negotiations.
After Trump’s relieved tone on ZTE Corp. sanctions, stocks of U.S. suppliers relevant to ZTE business including Qualcomm Corp., Lumentum Corp. and Intel Corp. pushed up quickly, boosting technology indexes on Monday.
Tuesday’s intraday index pulled back slightly, may influenced by Ross’s statement on alternatives to punish ZTE Corp. On a daily chart, the Nasdaq 100 index hit two-month’s high and also attempted to reach the upper line of the ascending channel. However, near-term support on MA5 has formed around 6930.0 and a breakout lower will expose another support on 6846.7. From here, near-term resistance is around 7017.5. A push higher exposes a session high at 7187.7.
A recent surge in the index pushed the Relative Strength Index (RSI 7) into the overbought area, showing a strong performance. Short-sell investors can get into the market when RSI retreats below 70.
Chart 1: NASDAQ 100 Daily