NASDAQ 100 Index Analysis as Economic Metrics Improve

In a trading session that saw major indices such as Dow Jones Industrial Average and S&P 500 losing in the markets, the NASDAQ 100 index also performed abysmally, dropping by 1.45 per cent to close the markets at $11699. The drop was also a reversal from Tuesday’s trading session that opened with a huge gap-up, and despite intraday trading being bearish, it ended up with a price gain of 1.45 per cent. 

The NASDAQ 100 drop also came amidst reports of improved U.S retail sales data for the month of October, up by 1.3 per cent in October. The better-than-expected sales performance, as reported by the Commerce Department yesterday, was partly due to households stepping up purchases of motor vehicles and a range of other goods, which signalled consumer spending was improving in the fourth quarter of the year. 

There have also been signs o a slowdown in inflation that has raised optimism that the US economy is making a comeback. For months, there were fears that the current rates of inflation could trigger a recession by as early as the start of next year, which could have spelt doom for the NASDAQ 100 index.

The declining interest rates and strength in consumer and business spending could also see the Federal Reserve subsiding inflation and giving the U.S. central bank room to scale back the current high-interest rates that have put the NASDAQ 100 index under pressure and affected the entire US stock market for the past few months. 

NASDAQ 100 Index Forecast

Therefore, as seen from the above fundamental analysis, despite the continued drop in NASDAQ 100 index, the long-term data points to an aggressive bullish push. On the technical side of things, the index also looks poised to resume the bullish trend that started on November 4 and has seen the index rise by over 10 per cent to date. 

Therefore, there is a high likelihood we might see the NASDAQ 100 index trading above the $12000 price level in the next few trading sessions. For the long-term, I expect it to hit and trade above the $13000 price level. A drop will $11500 will invalidate my bullish price analysis.

NASDAQ Daily Chart