NASDAQ Price Analysis – March 28, 2023

Daily Price Outlook

The tech-heavy NASDAQ 100 ended the session 0.7% lower, halting a two-week advance. The two-year Treasury yield exceeded 4%. On Monday, the S&P 500 increased, with financial firms in the index climbing over 1%. Energy producers also experienced gains.

A measure of regional lenders rose about 2.5%, as First Citizens BancShares Inc. surged over 50% after agreeing to purchase SVB Financial Group's Silicon Valley Bank. First Republic Bank soared on a Bloomberg report that US authorities are considering expanding an emergency lending facility, giving the lender more time to strengthen its balance sheet.

The stock market rally attempt continues, but the indexes have been volatile, and the breadth has been narrow. The major indexes rose modestly for the week but were far off weekly highs. The Russell 2000 reached 2023 lows with bank stocks, but small caps and banks edged up for the week.

The rally attempt has relied heavily on big-cap Nasdaq stocks, such as Apple, Microsoft, Tesla, Regeneron Pharmaceuticals, MercadoLibre, and Palo Alto Networks.

REGN stock entered a buy zone late in the week due to positive drug trial news. Apple and Microsoft are just above buy points, while Palo Alto is just below an entry. MercadoLibre and Tesla stock are maintaining key support levels, not far from being actionable. All have strong relative strength lines.

However, just because individual stocks are potential buys doesn't mean investors should act on them. This market rally attempt still needs to confirm its uptrend.

First Citizens BancShares will acquire SVB Financial's Silicon Valley Bank. First Citizens, based in North Carolina, will assume all SVB deposits and purchase around $72 billion in assets at a discount of $16.5 billion, according to the FDIC. Some $90 billion in assets will remain under FDIC receivership, with an estimated cost to the deposit insurance fund of $20 billion.

FCNCA stock jumped over 35% early Monday.

The FDIC has been trying to sell Silicon Valley Bank for over two weeks. US regulators may expand an emergency lending facility for banks, aiming to help First Republic bolster its balance sheet, as reported by Bloomberg on Saturday. Authorities are considering various options and do not see First Republic as needing urgent new help.

FRC stock skyrocketed 25% in premarket trade. Several other hard-hit financials rose solidly, with modest gains for banks large and small, including Deutsche Bank.

Late Friday, the Fed reported that deposits at small domestically chartered banks fell by $120 billion in the week of March 15 but increased by $67 billion at large domestically chartered banks.

On Friday, numerous banks rebounded from 2023 lows after concerns expanded, at least temporarily, to Deutsche Bank. Even Wall Street giants like JPMorgan Chase and Morgan Stanley briefly undercut recent lows before closing better.

NASDAQ Price Chart - Source: Tradingview

NASDAQ Intraday Technical Levels

Support      Resistance

12630           12808

12517           12874

12450           12986

Pivot Point: 12695

NASDAQ – Technical Outlook

The NASDAQ currently exhibits a slight bullish tendency but faces resistance at the $12,700 level. Meanwhile, support appears to be firm at around $12,450. If the NASDAQ falls below the next significant support level of $11,850, it could expose the index to the next support area at $11,600.

Both the MACD and RSI indicators suggest a bearish market sentiment, as they are in the selling zone. However, if the NASDAQ manages to surpass the $12,700 level, it may potentially target the $13,000 or $13,200 levels on the upside.

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