The Nasdaq rallied higher after dovish FOMC to then fall after mixed results from big tech. What next?

Where next?

The Nasdaq 100 has rallied over 700 points since Wednesday to then be met with tough resistance at 12,900, brought on primarily by poor results for Apple, Amazon & Alphabet (all falling over 4%). This shows how at the moment volatility remains high and being on the wrong side of a trade could be painful. Major US indices have broken the medium-term downtrend dating back from the highs and this is very positive. From our perspective, moving averages are now starting to move up on daily and hourly timeframes therefore the bias is bullish with the idea of buying on dips. Interest rates will likely continue higher for a few more months, however, there will come a point when inflation cools and rates potentially drop, thus bolstering the markets. This could be anytime later within the year, and if it is, then it will give the markets a further boost. While there will likely be the urge to go short on such strong rallies it's important to understand that price action this year is up, the markets have had a 'buy on the dips' approach. Shorting could provide short-term large profits, however, buying on dips could potentially work out more profitable based on the current investor sentiment.

Technical Outlook

Looking at the Nasdaq here, tough resistance sits at 12,900 followed by major resistance at 13,000. A break above 13,000 would be the first time since August last year and potentially provide a larger upside move going into summer. Towards the downside, ample support sits below, firstly 12,300 followed by 12,100 and then 11,820. (moving averages on 4 hourly). Today will likely see some selling into the open and throughout the trading day given the poor results from the major tech companies, but the sentiment still remains up, for now. MACD is positive on Weekly & Daily. With RSI strong on most timeframes and in fact, overbought, therefore selling pressure today could bring back fair opportunities for long positions going into next week.