Will the Tech Rally Continue? The Technical Verdict on the NASDAQ 100

To say that the year 2026 has been extremely volatile for the world would be an understatement. From the start of the year, we have been seeing geopolitical havoc across regions and markets, which has affected various asset classes. However, if there is one asset class that has shown significant resilience to these geopolitical turmoils and macro headwinds, it has been the US tech sector. Propelled by robust earnings growth and unwavering conviction in the AI supercycle, the tech sector has continued to outperform. Nowhere is this divergence clearer than in the major indices: while the Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) are up a modest 6.57% and 10.38% year-to-date, the Nasdaq-100 (NDX) has surged an astounding 20.53%. But can this outperformance continue? Let’s turn to the charts to find out.

The Big Picture: Long-Term Chart

(Source: TradingView)

As we can see in the daily chart, after plunging to lows near 16,500 last year—triggered by President Trump’s reciprocal tariff announcements in early April—the index staged a massive ~57% rally over the next seven months to top out near 26,000. A healthy period of consolidation followed, keeping the price range-bound between November 2025 and March 2026. Despite a brief, late-March fakeout below this range, the index recovered immediately. Driven by blockbuster Q1 earnings across the broader tech and semiconductor sectors, the NDX saw an exponential rally in the next two months, surging over 32% from nearly 23,000 levels to close to 30,500 today.

While the bulls remain firmly in control for now, the probability of a sharp pullback or prolonged consolidation has also increased significantly. This view is validated by the daily RSI, which has been in overbought territory for over a month—something rarely seen even in powerful bull markets.

For long-term investors, however, there is no reason to panic. The primary uptrend remains sound as long as the NDX trades above its 100-day moving average (currently near 26,200); unless it goes below it, any minor pullbacks should be viewed as buying opportunities. However, if the index goes below the 100-day MA or retraces back more than 61.8% Fibonacci retracement level of this current upmove(currently near 25,850), one must exercise caution and avoid taking long positions. 

Near-Term Outlook: Short-Term Chart

(Source: TradingView)

On the short-term 1-hour chart, we can see the same strong uptrend that has been in play since late March. To track this momentum, we look at the Donchian Channels (which plot the highest highs and lowest lows over a specific period). For weeks, the index has literally been riding the upper Donchian band, constantly pushing it upward by creating higher highs.

This powerful upward move is also backed up by the ADX (Average Directional Index), which measures the pure strength of a trend. A reading above 20 means a trend has real power behind it, and it has consistently stayed above 20, even reaching past 50 at certain points. That tells us the buyers have been in absolute control of the price action.

However, over the last two days, we have started to see the first minor signs of fatigue in this rally. The index is currently struggling to go over the 30,700 level, and at the same time, the ADX has steadily dropped from 37 to 23.5 currently. While this breakdown in momentum does not mean the short-term uptrend is over, it is a warning sign that the bulls are feeling exhausted and the market needs a breather.

Because of this exhaustion, active traders need to manage their risk carefully here. Those who are already holding long positions from the past few days shouldn't rush to book their profits and close out their positions at this juncture. A long position already in profit must ideally be closed only when the index drops to touch the lower Donchian channel, which is currently NEAR 30,100, and the ADX is below 20.

On the other hand, traders who are currently on the sidelines and looking to go long must ideally wait for a strong pullback or an extended period of consolidation before entering. However, under any circumstances, one should completely refrain from going short at current levels, considering the strong uptrend and the risk of sudden upmoves that can easily take out stop losses.