Last Updated on 23/09/2026
- The Nasdaq 100’s upward trend remains in place, although the potential for additional gains may be becoming more limited.
- Semiconductors, cybersecurity and space stocks continue to outperform software and energy shares in terms of momentum.
- With October drawing closer, the current market strength could increasingly present an opportunity to take some risk off the table.
The Nasdaq 100 rally remains intact, with enough momentum to potentially retest its previous high before market conditions become less supportive. Since July 30, the index has maintained an upward trend, while the late-August correction found support near the 38% Fibonacci retracement level. Buyers returned before the pullback could develop into a deeper decline. With the previous daily closing high near 30,700 now approaching, the next potential upside area is around 32,000.
However, the market should not be viewed as a one-way trade. The key point is that the current rally may still have some room to run, while the risk environment could change significantly as October approaches. Election-related uncertainty could create greater volatility for both the Nasdaq 100 and S&P 500, with momentum-driven areas such as AI, semiconductors and space stocks potentially experiencing larger swings than the broader indices.
For now, the short-term setup continues to support the existing rally, but the focus is increasingly shifting toward managing exits rather than establishing positions based on expectations of uninterrupted gains for months. The coming sessions could provide an opportunity to reduce exposure into strength, particularly for positions that were bought at higher levels and have recently recovered some of their losses.
The Nasdaq 100 Trend Remains Positive, but the Exit Window Is Approaching
The technical picture remains constructive because the index successfully absorbed the late-August correction without breaking its broader uptrend. A pullback that holds around the 38% Fibonacci retracement before turning higher generally indicates that buyers remain active before deeper support levels are tested. This keeps the 32,000 area in focus as a potential extension target, although reaching that level is not necessary for the bullish structure to remain valid.
The main distinction is between the direction of the trend and how long it can persist. Over the next few sessions, the market can still move higher. Further out, however, uncertainty increases as election-related risks become more relevant to price action. The index could rise for several sessions, experience a short decline and then recover again. The important factor is whether key support levels continue to hold as the market approaches its previous high.
For traders looking for a relatively tight risk level, 30,000 is the first support worth watching. A move below this area would provide an early indication that momentum is weakening. More significant structural support is located around 28,850. As long as the Nasdaq 100 remains clearly above that level, the broader bullish structure remains intact.
October risk is important because individual stocks rarely remain disconnected from the broader index for an extended period. Company-specific catalysts can temporarily push individual shares higher even when the Nasdaq 100 is declining, but these situations are exceptions. A broad correction in the index would likely pressure growth stocks, with higher-beta areas such as AI and space potentially experiencing substantially larger declines.
This makes the current rally particularly relevant for portfolio management. Investors holding weaker positions at a loss may have an opportunity to reduce those losses if prices continue to recover, while profitable positions can be managed with tighter risk controls as October approaches. The objective is not to predict the exact size of a future decline, but to recognize that the risk-reward balance could become less attractive as uncertainty increases.
The S&P 500 Shows a Similar Pattern
The S&P 500 is displaying a broadly similar setup. Its previous high is around 7,815, while continued strength could potentially take the index toward 7,900. Initial support is around 7,574, with approximately 7,680 serving as a closer level for traders seeking an earlier indication of weakening momentum.
These levels provide a relatively clear framework. If the index remains above the nearer support and the Nasdaq 100 maintains its breakout structure, the short-term trend remains positive. A move below 7,680 would provide an initial warning that momentum is fading, while a break below 7,574 would represent a more meaningful deterioration in the broader technical setup.
Watching both indices together is useful because the Nasdaq 100 often reflects stronger exposure to high-beta growth stocks, while the S&P 500 provides a broader measure of market participation. If both indices remain firm toward the end of September, the broader market could continue moving higher even as individual sectors perform differently.
Semiconductors Continue to Show Strong Momentum
Among the major sector ETFs, semiconductors continue to display a relatively strong technical structure compared with software. The VanEck Semiconductor ETF (SMH) has maintained its positive trend, with initial resistance around 619–620 and a larger potential upside zone near 660. The latter is not guaranteed, but continued momentum keeps that area relevant.
The key downside level is around 581. Because the ETF has already advanced significantly, this stop is relatively distant from current prices. For existing positions, that may be manageable because the trade has already moved favorably. For new entries, however, timing becomes more important because buying after a substantial rally can result in a less favorable risk-reward profile.
The memory segment is considerably more volatile. The DRAM ETF could potentially revisit the 67.5–68 region, while support and risk control remain around 59.40. Memory stocks can outperform the broader semiconductor sector when momentum accelerates, but they can also experience substantially larger declines if the Nasdaq 100 enters a correction.
The semiconductor case is therefore not about low risk. Rather, the sector continues to combine visible upside potential with a strong growth narrative relative to some other areas of the market.
Software Still Has Upside, but the Setup Is Less Attractive
Software could continue rising if the Nasdaq 100 remains strong, but that does not necessarily make it an attractive area for adding fresh risk. IGV already experienced a significant rally, reached the 107–108 resistance zone and then pulled back. As a result, another rebound could potentially provide a better opportunity to reduce exposure than to initiate a new position.
The issue is not necessarily the underlying quality of software companies. Instead, the sector has already experienced a substantial advance, while its current valuation and growth expectations may leave less upside compared with areas such as semiconductors or space.
This illustrates why a bullish index does not mean every sector needs to be bought. The broader market can continue rising while certain sectors are better suited to portfolio adjustments. IGV could still move higher over the next few sessions, but initiating a position now with the expectation of a quick gain may offer a less compelling setup than sectors where the longer-term upside remains more visible.
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Cybersecurity Remains a Strong Area Within Software
Cybersecurity continues to stand out within the broader software sector. CIBR moved above 101 after previously providing an entry opportunity around 95, and the breakout has continued to hold. One of the most important technical developments is that the previous 101 resistance area has now turned into support.
The weekly chart does not show an obvious nearby resistance level, making a precise short-term target difficult to establish without relying on longer-term projections. In a strong breakout, managing the position around support can therefore be more useful than setting an arbitrary upside target.
For now, 101 remains an important level to monitor. A sustained move back below it would weaken the breakout, while continued trading above it would preserve the positive trend. Given the possibility of fewer strong trading sessions before October-related risks increase, using the former resistance as a trailing risk-management level may be more practical than targeting an aggressive multi-month advance.
Energy Continues to Move in the Opposite Direction
Energy remains one of the weaker areas of the market, with XLE still being influenced by the decline in oil prices. Brent failed to hold above $100 on a sustained basis, while the latest pullback has weakened the energy ETF enough to make rallies look more like opportunities to reduce exposure than fresh entry points.
The recent attack affecting Saudi Arabia’s East-West pipeline temporarily disrupted this bearish oil narrative. Prices initially moved higher as concerns over alternative supply routes increased, particularly around the Strait of Hormuz. However, expectations that Saudi Arabia can restore the pipeline and operate it at partial capacity before completing full repairs have changed the supply outlook.
The United Arab Emirates continues to export through Fujairah, while reports indicate that Saudi shipments are also finding alternative routes through the Strait. The potential restoration of East-West pipeline capacity therefore reduces the need for Brent to remain above $100 solely because of the infrastructure disruption.
The XLE chart reflects this pressure. The ETF has moved below its previous stop level on the four-hour chart, while 61 has become an important support area. A break below that level could signal another downward move in energy equities.
Rocket Lab and AST SpaceMobile Highlight the Strength in Space Stocks
Rocket Lab gained roughly 8% in the previous session and continued to show strong momentum ahead of the next market open. The move demonstrates how quickly capital can rotate into the space sector when risk appetite increases. However, the stop area around 66.7–66.8 remains significantly below the current price, highlighting how extended some positions have become.
AST SpaceMobile has also shifted to a buy signal after repeatedly producing bear traps within its longer-term upward trend. The technical structure suggests that buyers have regained control, with the 72–73 area representing a potential upside zone before October-related risks become more significant.
These stocks demonstrate the potential for outsized gains during the later stages of an index rally. At the same time, they require disciplined risk management because high-beta positions can reverse much faster once the broader market changes direction. In these trades, upside potential and exit discipline need to be considered together.
Strength Could Become an Opportunity to Reduce Risk
The most important feature of the current setup is not simply the upside targets. It is the potential transition from an environment where adding exposure was attractive toward one where market strength may increasingly be used to manage exits.
The Nasdaq 100 could still retest 30,700 and potentially extend toward 32,000. The S&P 500 could revisit 7,815 and possibly reach 7,900. Semiconductors and cybersecurity may continue advancing, while space stocks could experience another sharp move higher. None of these possibilities necessarily conflicts with the idea that the risk-reward profile could deteriorate as October approaches.
This is particularly relevant for investors still holding positions below their original entry prices. A continued recovery into late September could provide an opportunity to reduce losses under more favorable market conditions than during a sharp sell-off. Holding simply because a position remains below its purchase price does not change the risks associated with its future price movement.
A more useful consideration is what the position may do from its current level. If the Nasdaq 100 turns lower and the stock has high beta, its previous purchase price will not provide protection against another decline. In that situation, reducing exposure during strength and potentially reassessing the position later may offer greater flexibility than simply holding through a correction to avoid realizing a loss.
The same principle applies to profitable positions. A rally toward resistance can provide an opportunity to reduce risk while liquidity and sentiment remain supportive. Traders do not need to identify the exact market top. The key is recognizing when the remaining upside becomes smaller relative to the downside risk that could emerge if the broader market environment changes.
Key Levels to Monitor
The short-term market structure remains positive. Nasdaq 100 support is holding, the S&P 500 continues to trade near its highs, SMH has room before its larger resistance zone, CIBR has completed a notable breakout, and space stocks continue to show strong momentum.
At the same time, the weaker areas are becoming clearer. Software can still participate in a broader rally, but its upside appears less compelling following its previous advance. Energy remains vulnerable as Brent loses momentum and expectations for Saudi export capacity normalize.
The larger strategic shift could come when the Nasdaq 100 itself produces a meaningful sell signal. If that occurs around the start of October, high-beta positions should not be considered separately from the broader market. Space stocks, memory shares and speculative AI names could react much more sharply than the index, making disciplined risk management particularly important.
For now, the broader trend remains positive, the previous Nasdaq 100 high remains within reach, and another upward move is possible. However, as October approaches, the focus may increasingly shift from chasing additional upside toward managing existing exposure and using periods of market strength to improve portfolio positioning.
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