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Nasdaq 100 Regained 12,000 – Is the Consolidation Over?

Nasdaq 100 jumped aggressively after Election day, up 9% and rising. In doing so, it kept the bullish trending conditions intact – the series of higher lows and lower highs remains unbroken.

The entire stock market in the United States has a bid tone, but Nasdaq 100 in particular. If the recent consolidation prior to Election Day was nothing but a continuation pattern, then the tech index has the potential to move even higher.

Today’s FOMC Statement and press conference may reveal more easing from the Fed. So far this week, the RBA in Australia and the BOE in the United Kingdom announced fresh stimulus. Moreover, the ECB already pre-committed to more easing in December. Hence, the chances are that the entire move is coordinated by the Fed and today is just as good an opportunity to do so as any.

No Tax Rise Potentially Behind Nasdaq’s Strong Performance

Another reason for the spike higher in the tech index comes from the elections’ outcome. It is not only the Presidency but the Congress’ componence that matters.

As such, if the current Biden win – Republican take the Senate scenario is valid, there is less chance of a tax raise to come anytime soon. Hence, the tech sector is up.

Nasdaq 100 Technical Analysis

The chart below may look simplistic, but sometimes simple things work best. The most important fact on this chart is that the series of higher lows held. More precisely, since the March decline, the Nasdaq 100 index formed a series of higher highs and higher lows that held to this day.

Naturally, the expectations are that the index will march for a new higher high – as it did so many times this year. But in doing so, it may also break the horizontal consolidation, triggering a run for its measured move to the 15,000. As such, bulls may want to buy a new higher high for 15,000 and have a stop measured as half the projected distance.

Nasdaq 100 Price Forecast