THE Nasdaq 100 Index (NDX) enters the final week of June at a decisive technical inflection point, trading near 21,720 after rallying 32 per cent from its April lows.
This robust uptrend – anchored by the 20-day Simple Moving Average (SMA) – now faces formidable resistance near the 22,000 to 22,222 zone, a level which has withstood four breakout attempts since December 2024. Investors are bracing for heightened volatility amid Middle-East tensions and as the Jul 9 end of US tariff deadline extension looms.
Since April 2025, the 20-day SMA has consistently acted as dynamic support, propelling the index higher during each pullback.
This moving average is currently around 21,560. A pullback to below 21,300 likely indicates the breach of the support level, potentially triggering a slide towards the 76.4 per cent Fibonacci retracement level at 20,880. The 50-day SMA near 20,380 would then be the next support level to monitor if there is any short term pull back to the 76.4 per cent Fibonacci level.
The 22,000-22,222 barrier represents a triple technical threat: February 2025’s all-time high, the 100 per cent Fibonacci retracement level, and a psychological milestone. Historical price action reveals this zone’s significance – each prior rejection has triggered increasing selling pressure. A decisive close above 22,222 could unlock upside towards 22,800 and 23,250.
However, momentum indicators flash caution. The Relative Strength Index (RSI) shows bearish divergence, with lower highs from May to June despite the index’s higher peaks in the same period. If the RSI continues to dip to below 50, it could signal a deeper pullback as we enter the third quarter of 2025.
The ongoing Israel-Iran hostilities continue to inject uncertainty into global equity markets. Any escalation threatening oil supply routes or energy infrastructure could reignite risk aversion.
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The expiry of the US tariff suspension on Jul 9 presents a more immediate concern. The US and its major trading partners have yet to reach conclusive agreements. Market sentiment could improve if there is a further extension or progress in trade negotiations.
In addition to the upcoming US tariff extension deadline, several key developments may influence market direction. These include the US Federal Reserve’s recent update of two anticipated rate cuts in 2025 as well as the upcoming earnings season for US mega-cap technology companies. Both could serve as catalysts for the NDX’s performance.
The Nasdaq 100 Index stands at a crossroads. Its technical foundation remains solid, a strong bullish run for weeks, supported by the 20-day SMA. Yet the quadruple-top resistance at 22,000-22,222, fortified by bearish momentum divergence, deserves concern.
Investors should consider exposure near resistance, and position for various outcomes from the Jul 9 tariff decision. Whether the index surges towards new highs or revisits the 20,880 support zone will depend largely on how geopolitical tensions and trade policy uncertainties unfold in the weeks ahead.
The writer is manager, dealing & investor education, at PhillipCapital
