NASDAQ100 ↗️
The market is at the countertend break, but there is one key level before the expansion phase begins.
Key Chart (DAILY) - US100
The daily waves have turned up, reaching the countertrend line, so as long as the daily impulse base holds the price, the long trend may continue.
There is a clean H4 breakdown in the way. That may be a level where the market finds resistance, but if broken, the expansion phase begins and the weekly and daily fibo targets become valid.
Key Fundamentals
Summary
The NASDAQ 100, a benchmark index for the U.S. technology sector and growth stocks, is experiencing a correction due to rising interest rates and tightening financial conditions. Despite this, opportunities persist in undervalued tech stocks, especially those tied to innovation like artificial intelligence (AI) and cloud computing.
Supply and Demand Factors
1. Demand: Institutional interest remains strong in AI-driven tech, as highlighted by Microsoft’s dominance in AI-powered cloud services. Retail investors have shown caution due to increased volatility stemming from macroeconomic uncertainty.
2. Supply: Share buybacks from tech giants like Apple and Alphabet bolster demand for equities, but profit-taking by early AI investors is creating short-term selling pressure.
Key Risks
1. Rising Bond Yields: The 10-year Treasury yield recently surpassed 4.5%, creating a more attractive risk-free alternative to equities. (Source)
2. Valuation Concerns: The price-to-earnings (P/E) ratios of many index constituents remain elevated, posing risks if earnings growth slows.
3. Economic Slowdown: Potential U.S. recessionary pressures in 2025 could weigh on growth stocks. (Source)
Conclusion
The NASDAQ 100 remains a pivotal index reflecting the health of growth stocks. While high interest rates and stretched valuations present headwinds, undervalued names like Alphabet and Qualcomm, trading at attractive P/E ratios, offer selective opportunities for growth-oriented investors. The AI revolution and ongoing innovation in tech sectors remain the key drivers for long-term performance.