Categories: Market Overview

Nasdaq100: not yet a correction

The Nasdaq100 index was once again the main driver of growth in US indices in May, indirectly also positively influencing markets elsewhere. On Thursday, the index was approaching the 19,000 level, adding over 11% to the 19 April lows. An impressive wave of selloffs hit the market, taking 2% off the index from peak to bottom. And now, the legitimate question is, are we seeing the beginning of a long correction?

Technically, the Nasdaq100 index is at the threshold of the overbought zone on RSI on daily timeframes. Contrary to the name, entering this area is more likely to see the most intense growth, although the least unpredictable. Buyers’ interest is supported by the fact that the index is now only 1% above the previous peak. After that peak, there was already an April correction that removed much of the market’s short-term overheating.

The correction in July-October last year fits into a classic Fibonacci pattern, bringing the Nasdaq100 index close to 61.8% of the original rally and one hair away from the 200-day moving average. This should classically be followed by a rally to 161.8%, around 19200.

So, the Nasdaq100 is a little short of an important resistance area. But it is quite possible that it simply pauses to consolidate forces before a new leap upwards.

However, without a dramatic change in sentiment or a dramatic deterioration of economic data, we should not expect a steady decline in equity indices. The last downward impulse was short-term profit-taking provoked by a new batch of strong macroeconomic data. They suggest tighter monetary policy, but that is not a sufficient reason to start a bear market in equities.

Still, it is worth noting that a drop below the previous consolidation at the top near 18300 could be an important technical signal of a trend reversal.

The FxPro Analyst Team

The FxPro Analyst Team

Our team consists of financial market experts. Our dedicated professionals prepare reviews on the foreign exchange market situation, Crude Oil, Gold and Stock Indices. All the analysts are regularly published in the world leading economic media.

Share
Published by
The FxPro Analyst Team
Tags: Nasdaq 100

Recent Posts

The dollar has reached range limits

The US dollar has strengthened, reaching the upper boundary of its trading range. The British…

38 mins ago

Crypto: Tug-of-war at new altitude

Cryptocurrencies continued to surge, pushing the total cap to $3 trillion. Bitcoin has gained nearly…

1 hour ago

USDJPY Wave Analysis 13 November 2024

- USDJPY broke key resistance level 154.70 - Likely to rise to resistance level 157.20…

21 hours ago

USDJPY Wave Analysis 13 November 2024

- USDJPY broke key resistance level 154.70 - Likely to rise to resistance level 157.20…

21 hours ago

WTI crude Wave Analysis 13 November 2024

- WTI crude oil reversed from the multi-year support level 66.70 - Likely to rise…

21 hours ago

Japanese inflation continues to rise

Japanese inflation is rising, with corporate goods prices inflation accelerating to 3.4% y/y in October,…

24 hours ago

This website uses cookies