NASDAQ Index, SP500, Dow Jones Forecasts – NASDAQ Rallies As Traders Buy Software Stocks

SP500 Tests New Highs As Rebound Continues

SP500 is moving higher as traders focus on the better-than-expected housing market data. Housing Starts  grew by +6.2% month-over-month in December, while Bulding Permits increased by +4.3%. Both reports exceeded analyst estimates by a wide margin.

Tradres also focused on the Durable Goods Orders report, which showed that Durable Goods Orders decreased by -1.4% month-over-month in December. Analysts expected that Durable Goods Orders would decline by -2%.

The better-than-expected Industrial Production report provided additional support to SP500. The report indicated that Industrial Production increased by +0.7% month-over-month in January, compared to analyst consensus of +0.4%.

Basic materials stocks were among the biggest gainers today as traders focused on the strong rally in precious metals markets. Energy stocks have also gained significant upside mometnum as traders reacted to the rally in the oil markets, which was triggered by rising geopolitical tensions.

Consumer defensive, real estate and utilities stocks declined as Treasury yields moved higher. Falling demand for safe-haven assets served as an additional bearish catalyst for these stocks.

SP500 moved above the resistance at 6870 – 6880 and is trying to settle above the 50 MA at 6900. In case this attempt is successful SP500 will move towards the next resistance level, which is located in the 6940 – 6950 range. RSI is in the moderate territory, and there is enough room to gain momentum in case the right catalysts emerge.

NASDAQ Rallies Amid Rising Demand For Tech Stocks

NASDAQ tested new highs amid rising demand for tech stocks. Shopify and Applovin were among the biggest gainers in the NASDAQ index today.

Software stocks rallied as traders started to bet on a rebound after the huge sell-off, which was triggered by AI-related worries.

Some traders are not convinced that AI will destroy the business of software companies and are ready to search for stronger players with wide moat. It remains to be seen whether it’s another case of a classical dip-buying or a reversal of the previous bearish trend.

Currently, NASDAQ is trying to settle above the 50 MA at 24,966. In case this attempt is successful, NASDAQ will move towards the nearest resistance level, which is located in the 25,200 – 25,250 range. A move above the 25,250 level will push NASDAQ towards the next resistance at 25,600 – 25,650.

Dow Jones Tests The 50 MA

Dow Jones gained some ground amid broad rally in the equity markets. Dow Jones failed to gain significant upside momentum as demand for defensive sectors declined.

Walmart and Procter & Gamble were among the biggest losers in the Dow Jones index today. Rising Treasury yields put pressure on dividend stocks.

Amazon and NVIDIA  gained ground amid rising demand for AI-related stocks, providing support to the Dow Jones index.

From the technical point of view, Dow Jones moved above the resistance level at 49,500 – 49,600 and is trying to climb above the 50 MA at 49,839. In case Dow Jones manages to settle above the 50 MA, it will head towards the next resistance level, which is located in the 50,100 – 50,200 range.

On the support side, a move below the 49,500 level will push Dow Jones towards recent lows near the 49,200 level. A move below 49,200 will open the way to the test of the support level at 48,700 – 48,800.

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