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Nasdaq 100 Wavers in Pre-Market as Sector Rotation Continues

Nasdaq 100

Nasdaq 100 futures are wavering today as US investors return after the long Thanksgiving holiday. The index has risen by more than 9% in November after dropping in September and October.

The Nasdaq 100 and other American indices have had a relatively successful month. In November, the Dow Jones and S&P 500 indices reached their all-time highs as investors moved back to stocks after the positive vaccine and US elections numbers.

However, the Nasdaq, which is made up of technology stocks, underperformed the other two major indices. That was because of a sector rotation from technology companies to value stocks. Tech firms were the best-performers before the vaccine news came out.

Today, investors will continue focusing on the ongoing wave of consolidation. Last week, it was reported that Salesforce was considering acquiring Slack, in a deal that would value the company at more than $17 billion.

And early today, the Wall Street Journal said that S&P Global was in the final stages of announcing a deal to acquire IHS Markit, a leading provider of data. As such, investors will be thinking about other possible M&A deals that will be announced in the coming days.

Nasdaq 100 technical outlook

On the daily chart, we see that the Nasdaq 100 index has been in a strong upward trend from its November low of $10,970. At the current price of $12,262, the price is just a few points below its all-time high of $12,473.

The index is also above the 25-day moving average while the Relative Strength Index (RSI) has continued to rise. Similarly, the price is above the ascending green trendline and is also forming a triple-top pattern.

While a triple-top pattern is usually bearish, I predict that the price will continue rising as the Santa rally starts. If it does, the next key level to watch will be $13,000, a psychological level.

Nasdaq technical chart

Nasdaq 100