Record Highs Tested: S&P 500 and Nasdaq 100 Overbought

US Equities face Q1 uncertainty as S&P 500 and Nasdaq 100 reach overbought levels; key support and resistance levels analyzed.

In the first quarter of 2023, US equities, particularly the S&P 500 and Nasdaq 100, face a challenging landscape as technical indicators suggest overbought conditions. The S&P 500 has seen a remarkable climb since November, flirting with the January 2022 highs above the 4800 mark. The recent surge aligns with a dovish stance on rate cuts, adding to the positive momentum already experienced earlier in the year.

Record Highs Tested: S&P 500 and Nasdaq 100 Overbought

Technical analysts note the challenge in reading the current situation, with immediate resistance observed around the 4817 mark, the previous high. If the market breaches this barrier, predicting becomes complicated due to the absence of historical price action, and the psychological level of 5000 is likely to present a significant hurdle. In the event of a retracement, support levels are identified at 4639 and further down at the 4600 area, with additional levels listed for potential downside scenarios.

S&P 500 Key Levels

Support Levels: 4600, 4435 (20-day MA), 4288 (50-day MA), 4172 (100-day MA)

Resistance Levels: 4817, 5000

Turning to the Nasdaq 100, the technical outlook is even more challenging due to uncharted territory and recent record highs. Anticipating resistance levels is complicated by the absence of historical price action, with psychological levels such as 17000 likely to act as a significant obstacle, possibly triggering a retracement. During a downturn, analysts identify the previous swing high at 15960 as the first key support area, with additional support levels ranging between 15950 and 15000.

Nasdaq 100 Key Levels

Support Levels: 15950, 15328, 15000, 14750

Resistance Levels: 17000, 17500, 18000, 18500

As US equities navigate these uncertain waters, investors and analysts will closely monitor these key levels to gain insights into potential market movements and the sustainability of the current bullish trends.

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