NASDAQ 100: The air is thin
The technology-heavy selection index Nasdaq 100 continues to show an intact upward trend in all relevant time frames. Most recently, it generated a significant follow-up buy signal on June 22nd with the breakout of a rising resistance line along the highs of February 16 and April 16. At the start of the week, a new record high of 14,899 points was achieved intraday.
There is no seasonal tailwind
In our opinion, the risks for a top education starting soon increase significantly. The current price surge should represent the "final hurray" before a medium-term correction phase. In terms of seasonality, a phase of weakness beginning in mid or late July and lasting into autumn would fit into the typical pattern. With their extremely overbought levels and, in some cases, negative divergences from the price curve, the technical market oscillators confirm the assessment of an increased likelihood of clearer profit-taking after the impressive rally of recent months.
Investor euphoria and weak market breadth
The evaluation of the sentiment data and the analysis of the market breadth also make us cautious. The rally is being carried by fewer and fewer stocks and the options market (equity put / call ratio) reflects an extreme carelessness among market participants.
Doji candle on the corral
With a look at the candle chart, yesterday's Doji urges caution. If a sustained breakout succeeds over the current resistance and target zone 14,899 / 14,913 points and the hurdle just above it at 14,960 / 15,000 points per day's end, we could imagine an extension of the rally in the direction of 15,200 / 15,300 points before the topic corrects again comes to the fore. An upstream slide below the support at 14,552 points would, in our opinion, provide the first procyclical confirmation of the transition to the targeted correction phase. In this case, a test of the trend line starting from the November low at currently 13,550 points would not be a surprise over a period of several weeks.
Note:
Despite careful analysis, Global Investa accepts no liability for the content, topicality, correctness or completeness of the information provided. The information provided does not constitute investment advice, purchase recommendations or investment brokerage.
There is no seasonal tailwind
In our opinion, the risks for a top education starting soon increase significantly. The current price surge should represent the "final hurray" before a medium-term correction phase. In terms of seasonality, a phase of weakness beginning in mid or late July and lasting into autumn would fit into the typical pattern. With their extremely overbought levels and, in some cases, negative divergences from the price curve, the technical market oscillators confirm the assessment of an increased likelihood of clearer profit-taking after the impressive rally of recent months.
Investor euphoria and weak market breadth
The evaluation of the sentiment data and the analysis of the market breadth also make us cautious. The rally is being carried by fewer and fewer stocks and the options market (equity put / call ratio) reflects an extreme carelessness among market participants.
Doji candle on the corral
With a look at the candle chart, yesterday's Doji urges caution. If a sustained breakout succeeds over the current resistance and target zone 14,899 / 14,913 points and the hurdle just above it at 14,960 / 15,000 points per day's end, we could imagine an extension of the rally in the direction of 15,200 / 15,300 points before the topic corrects again comes to the fore. An upstream slide below the support at 14,552 points would, in our opinion, provide the first procyclical confirmation of the transition to the targeted correction phase. In this case, a test of the trend line starting from the November low at currently 13,550 points would not be a surprise over a period of several weeks.
Note:
Despite careful analysis, Global Investa accepts no liability for the content, topicality, correctness or completeness of the information provided. The information provided does not constitute investment advice, purchase recommendations or investment brokerage.
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