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NASDAQ Forecast – NASDAQ 100 Continues to Look Overdone

By:
Christopher Lewis
Published: Feb 13, 2024, 13:12 GMT+00:00

The NASDAQ 100 continues to rally overall but has been pulling back over the last 48 hours or so. Whether or not this continues to happen remains to be seen, but it certainly would be welcomed by most in the markets.

Nasdaq, FX Empire

In this article:

NASDAQ 100 Forecast Video for 14-02-2024

NASDAQ 100 Technical Analysis

The NASDAQ 100 has pulled back just a bit during the trading session here on Tuesday as we continue to see a lot of noisy trading. Ultimately, I think this is a situation where buyers will eventually return because quite frankly this is one of the most bullish markets I follow. The 20-day EMA is near the $17,500 level and pulling back to that level would also give enough value that I think a lot of people would get involved. Underneath there you have the 16,950 level.

This is an area that previously was resistant, and it now has the 50-day EMA attached to it. In other words, there are plenty of places underneath that the NASDAQ 100 could find plenty of technical buyers. This is a market that has been to the upside since roughly Halloween, gaining almost 29% from trough to peak. Ultimately, that is way too much, and we do need to pull back, and that pullback should offer plenty of opportunities. However, we don’t know how deep that pullback is. I would love to see a move down to the 16,950 level, which would be a drop of about 6%, but whether or not we can remains to be seen.

This is a byproduct of Wall Street buying the same seven stocks as usual because the NASDAQ 100 is driven by just a handful of major players. Keep in mind, it is not an equal weighted index, so you can’t look at this through the prism of buying 100 stocks. It’s really only buying about six or seven and those are all the usual suspects that are in everybody’s passive investing strategies. So, money is being squeezed into basically just a few small places, and this happens to be one of them. With this, you must be careful because the fact is that when everyone is in the same trade, when they run for the exits – it becomes a stampede and can be drastically dangerous.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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