Nasdaq Index – The recent price increase in the NASDAQ Composite suggests that the bear market trend seen for the first seven months of the year may be about to make a big comeback.
In the image below, we can see how the high lows line up with the flat highs to form the classic high triangle. This setup is usually a downtrend continuation pattern, but can be a reversal figure when seen in a broader trend.
On the daily chart, confirmation of this number came by breaking the upper area of $11,690 (the penultimate green color).
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To project a potential target (according to academic theory), we multiply the distance from the low (around 10,575) to the first short high (around 11,690) as the distance from a potential target point in the short . season (bringing us to around 12,950 points).
The next test for this figure should be the previous low of $12,230. Therefore, traders should stay on their toes as today and next week may give more signals about this move.
As always in technical analysis, we need to follow a trend, not predict it. Here, we can consider two factors (one for return and one for descent):
Regarding the potential trend reversal, I note how the NASDAQ reached a 100 session record below the 50DMA (68) (see image below). Generally, when such long records exist, it is an indication of a potential submarket.
File:nasdaq Composite Index.webp
In fact, many Big Tech stocks (for example, PayPal Holdings (NASDAQ: PYPL ) see the photo) also show a large divergence between prices and indicators, which argues for broad gains, at least in the short term. strengthens. PayPal Weekly Chart
On the other hand the case of a bear market – as in the chart below – argues that breakouts (even large ones) are a completely normal phenomenon in swing trends.
In fact, I include the rebounds (yellow box) in the picture above during the bear market period of the dotcom bubble. Despite the drop of more than 50%, we can see that the market has finally collapsed in the long run.
So as always, having a diversified strategy with money management, fractional inputs, diversification and correct time horizon is the best option.
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Chart of the Day: Alternative Responses to Change Along with the United States… By Pinchas Cohen/ -December 06, 2022 5) is a stock index composed of 102 equity securities issued by 101 of the largest non-financial companies and listed on the Nasdaq Stock Exchange. It is an asset weighted diversified index. The weighting of the stocks in the index is based on their market capitalisation, with certain ranges having the largest constituent effects. It is limited to companies of one transaction, and has no financial companies. Financial companies are in a separate index, the NASDAQ Financial-100.
He created two indexes: the NASDAQ-100, which includes companies in Industry, Technology, Retail, Telecommunications, Biotechnology, Healthcare, Transport, Media and Services, and the NASDAQ Financial-100, which includes banking companies, insurance companies, brokerage. companies, and mortgage loan companies.
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The base price of the index was initially set at 250, but when it reached 800 on December 31, 1993, the last trading day was changed to 125, leaving the price of the NASDAQ-100 half below that of the NASDAQ – which is common. known Composite. The first annual adjustments were made in 1993 before options on the index would begin trading on the Chicago Board Options Exchange in 1994. Foreign companies were admitted to the NASDAQ-100 for the first time in January 1998, but there were higher standards before the they could reach it. be added. Those standards were eased in 2002, when standards were raised for domestic companies, ensuring that all companies met the same standards.
The Invesco QQQ exchange-traded fund, sponsored and supervised by Invesco since March 21, 2007, trades under the Nasdaq symbol: QQQ. It’s called “Triple Qs” or “cubes”. It was previously known as the NASDAQ-100 Trust Series 1. On December 1, 2004, it was transferred from the American Stock Exchange, where the symbol was QQQ, to the NASDAQ, and given the new ticker symbol QQQQ , sometimes called “quad” ” . said. Qs” by traders. On March 23, 2011, the Nasdaq changed its symbol to QQQ.
NASDAQ-100 is often abbreviated as NDX100 in the foreign markets. Its related futures contracts are traded on the Chicago Mercantile Exchange. Regular futures are coded by the Reuters Instrument Code ND, and the smaller E-mini version uses the code NQ. Both are among the most traded deals.
The index peaked at 4,700 in 2000 during the dot-com boom, but fell 78% during the Stock Market crash of 2002.
Nasdaq Composite Index Should Pullback Soon
After a gradual 5-year recovery to a midday high of 2,239.51 on October 31, 2007, the highest since February 16, 2002, the index began 2008 below the 2,000 level was corrected during the late 2000s recession, the housing bust in the United States and the 2007-2008 financial crisis. Panic centered on the failure of the investment banking industry on September 29, 2008, it lost more than 10%, then the index suddenly plunged into a bear market. The NASDAQ-100, along with most of the broader market, experienced a lower option limit on October 24 and hit a 6-year low of 1,018 on November 20, 2008.
Amid quantitative easing (QE) from the Federal Reserve and optimism that the financial crisis is over, the index began a four-year high, reaching its highest level since May 15, 2013, on November 15, 2000. It has since been closed to 3,000. On October 18, 2013, with GOOG crossing $1,000 for the first time, the index hit 3,353.88 and intraday highs of 3,355.63, its highest level since the 2000 US election and more. It was three times more than the reduction in 2008.
NASDAQ has refined a series of strict standards that companies must meet in order to be listed. These standards are:
In addition, since 2014, companies with multiple classes are allowed to include multiple classes in the index, provided they meet NASDAQ’s criteria. Prior to 2014, companies in the index were limited to one class of stocks (usually the one with the larger market capitalization).
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When the makeup of the NASDAQ-100 changes in the delisting process (such as a transfer to another transaction, a merger and acquisition, or a declaration of bankruptcy, and in some cases, a delisting by NASDAQ for not meeting the listing requirements), the index gets rebalanced once a year, in December, when NASDAQ evaluates its constituents, compares them to those listed, re-rates all eligible companies and makes appropriate adjustments.
There are two tools that NASDAQ uses to determine the market values of companies for the annual survey:
Those entities that rank in the top 100 of all eligible companies in the annual review are included in the list. Those between 101 and 125 are only included if they were in the top 100 in the previous year’s annual survey. If they don’t make the top 100 in next year’s review, they will be dropped. Those not in the top 125 are demoted, regardless of last year’s ranking.
The index also drops a company if, in d of two consecutive months, it fails to obtain an index weight of at least one third of a percent. This can happen at any time.
Nasdaq Pattern Looks Like The 2000 Highs. Will Results Be Different?
Companies that are dropped are replaced by those with the largest market value that are already listed. Anticipating these changes can lead to changes in the prices of the affected companies.
The index reports every change, regardless, through the press
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