Nasdaq 100/USTEC Analysis
The Nasdaq has a similar look to the S&P 500 with perhaps even a bit more acceleration after last week. With the Fed taking a dovish tone, rates markets have fallen and this may make an even more bullish argument near-term for the Nasdaq than the S&P 500 or the Dow Jones.
The Nasdaq 100 just shredded through the 16k psychological level this week and that’s a point of potential support in the event of a pullback. On the upside, there’s a Fibonacci extension at 16251 that remains of interest. At this point it would be very difficult to justify bearish stances given this exuberant strength, but that level could be a point of contention for pullbacks or breakouts in the topside move.
- Excellent Earnings Results from more than 70% of the Companies that are in Nasdaq 100 - moving the prices up.
- Interest Rates in USA remain at historically Low levels - and are expected to remain the same until Q1 2022 - making money relatively easy/cheap to Invest.
- High Risky asset appetite due to low Interest Rates.
- USA infrascture bill of $1.2T has been passed recently.
- Easing of COVID-19 Curbs - increase demand for travel and general Expenditure.
Expanding Fibonacci extension From September 2021 High - October 2021 Low - gives us Technical Target for USTEC Bulls of $16521 . Since technical target has not been yet reached, its logical to assume that is where price is headed next for potential move of up 2% higher.
On The other hand, Indicator already flashing warning signals (12h RSI and Stochastic RSI are both in extremely Overbought territory) as for a potential pull back that is due in the near future, preferably after the 1.618 Fibonacci extension target has been reached. That would make price action clean as possible and hence there would very little uncertainty regarding the pull-back. 1.618 Fibonacci Extension level would almost certainly be meet with a lot of profit taking after such substantial rally of +15%.
The Fibonacci extension above is made in such a way that the Ultimate target of USTEC will be meet and present technically Ideal places where further Buy position may be established. Or it can be used as a take profit price IF a sell Position is established from above.