Don’t Forget About the Nasdaq
Everyone’s been so focused on the banks lately that they might have missed some potentially bullish happenings on the Nasdaq-100.
The first pattern on today’s chart is the 21-day exponential moving average (EMA). Other big indexes like the S&P 500, Dow Jones Industrial Average and Russell 2000 are well below the same lines on their respective charts. But the tech-heavy NDQ closed above it on Tuesday and Wednesday.
Second, the histogram at the bottom shows relative strength against the S&P 500 (with a trailing three-month period). Its recent outperformance is a big change from last year’s bear market, when the Nasdaq and “megacap growth” lagged the broader market.
Third, the index fell under the lows of the last two weeks on Monday morning. It quickly recovered, potentially creating a failed breakdown.
Next, yesterday’s price action probed under the previous session’s low and closed above its high. The result was a bullish outside candle.
Finally, the 50-day simple moving average (SMA) had a “golden cross” above the 200-day SMA this week. That ended more than a year with the faster SMA below the slower SMA.
These patterns may keep traders focused on the falling trend line that’s formed since early February. Could NDQ stun everybody by breaking out -- despite fears about bank failures?
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the 21-day exponential moving average (EMA). Other big indexes like the S&P 500, Dow Jones Industrial Average and Russell 2000 are well below the same lines on their respective charts. But the tech-heavy NDQ closed above it on Tuesday and Wednesday.
Second, the histogram at the bottom shows relative strength against the S&P 500 (with a trailing three-month period). Its recent outperformance is a big change from last year’s bear market, when the Nasdaq and “megacap growth” lagged the broader market.
Third, the index fell under the lows of the last two weeks on Monday morning. It quickly recovered, potentially creating a failed breakdown.
Next, yesterday’s price action probed under the previous session’s low and closed above its high. The result was a bullish outside candle.
Finally, the 50-day simple moving average (SMA) had a “golden cross” above the 200-day SMA this week. That ended more than a year with the faster SMA below the slower SMA.
These patterns may keep traders focused on the falling trend line that’s formed since early February. Could NDQ stun everybody by breaking out -- despite fears about bank failures?
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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