Dear trader, dear stock market friends.
Since the last analysis on March 4, not much has changed, at least in terms of the technical chart situation on the Nasdaq 100. After breaking out to a new all-time high at the beginning of March, the technology index has been treading water and consolidating sideways at a high level in a narrow trading range between 17,800 and 18,400 points.
Short-term support and resistance
As before, there has been no major correction. In the short term, the Nasdaq 100 is supported in the range of 17,800 - 17,900 points. Several local highs and lows of recent weeks are located at this price level. In addition, the daily EMA 50 is only a few points below the support area and will also continue to rise over the next few days, thus strengthening the support zone, as will the lower Bollinger Band.
Nasdaq 100 ends successful quarter
As can be seen on the monthly chart (below), the Nasdaq 100 only rose a few points in March. However, since the beginning of the year and the end of the first quarter of 2024, the index has already risen 1429 points or 8.5 %. On the one hand, the breakout above the old highs from 2022 cleared the way for a continuation of the upward trend from a technical perspective. On the other hand, the broad equity market has continued to be driven by various fundamental factors in recent months.
Growth targets for 2024 raised significantly
While last year many analysts were still predicting a weak economy in 2024, the picture has improved significantly in recent weeks and months and forecasts for economic growth have been continuously raised, giving the stock market a tailwind.
Fed likely to stick to interest rate turnaround
Despite the positive economic development and a robust labor market, the US Federal Reserve is sticking to its planned interest rate cuts in the current year, although the pace and number of expected interest rate cuts has declined. Consumer prices continued to fall slightly in the first quarter. However, this trend slowed and consumer prices for January and February were slightly higher than forecast, which is why the trend in inflation should continue to be monitored closely. Currently, 2-3 interest rate hikes are expected in the current year. However, if inflation picks up surprisingly strongly, the first rate hike could be postponed again.
AI boom drives stock market
Another trend that has driven the stock market in recent months has been the progress made in the field of artificial intelligence, which has led to a veritable AI boom. The prospects and growth potential of the sector remain positive and the Nasdaq 100 has a good chance of continuing to benefit from this trend in the future.
Still no correction
Like many other share indices, the Nasdaq 100 rose almost without pausing for breath. Nevertheless, it makes sense to factor in the scenario of a sustained correction. If this occurs, there will be new opportunities to enter on the long side, especially for medium to long-term traders and investors. An important support area is located at 16,400 - 16,700 points at the level of the old all-time highs from 2022. Even if this support area does not hold, the next strong support area would be at 15,700 - 16,000 points, as can be seen in the following monthly chart.
