The Nasdaq index futures are up by 70 points, adding to the gains made yesterday, when it climbed by 210 points. The index is trading at $11,551, which is in the same range it has been since September 2018.
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What’s moving the Nasdaq 100?
There are several factors affecting the tech-heavy index. First, there is talk about putting more pressure on technology companies in the United States. Just this week, Democrats revealed a report in which they said that Apple, Google, Amazon, and Facebook need to be broken down.
Republicans, in their part, did not recommend breaking the firms but they dwelled on censorship. Therefore, if the Democrats manage to win the senate, house of representatives, and the presidency, we could see these companies broken down.
Second, the Nasdaq index has wavered because of fears about valuations. In recent months, tech has been the driving force behind the stock market rally. At their peak, the five-biggest companies were worth more than $8 trillion, making them bigger than all countries except the US and China.
Third, tensions between the United States and China will have a major impact on technology companies that dominate the Nasdaq index. The current administration has banned Huawei and is currently putting pressure on TikTok. It has also banned SMIC, the largest Chinese chip company from selling and buying American components. China has responded by creating its own entity list that it will unveil after the election.
Other things moving the Nasdaq 100 today are the hopes of a stimulus, and the relatively weaker US dollar.
So, is the Nasdaq 100 index a buy?
Nasdaq index technical analysis
The four-hour chart shows that the Nasdaq index formed a double bottom at $10,675 on September 21 and 24. Since then, the price rose and reached a high of $11,618 on October 1 and then pulled-back and found support at $11,218. Today, the price is rising and is slightly below the initial resistance at $11,618. It is also being supported by the dynamic support of 25-day and 15-day exponential moving averages.
Therefore, today, I suspect that the index will continue rising as bulls aim for the resistance at $11,618. I also believe that the index will find some resistance if it hits this level. Still, if it crosses this level, it will bring the $11,800 level in view.
Alternatively, if the price manages to move below the support of $11,400 will send a signal that there are still more sellers in the market.