The American stock exchange reacted faster and more decisively to the violent sell-off in March. And among the American indices, the best performance was the Nasdaq technological stock index. That’s why the US Nasdaq index is set for new records.
Because the US Nasdaq index is set for new records
Before seeing together why the prices of the Stars and Stripes index are destined for new records, it is useful to underline an aspect of the US stock market. Several indices are listed on the American stock exchange. The S & P500 which summarizes the price trend of the 500 largest capitalization shares. The Dow Jones Industrial Index which summarizes the price movements of the top 30 listed industrial companies. There is the Nasdaq index in which the technology companies are included. And there is also the Russel index of the 2000 medium and small capitalization companies listed on the US Stock Exchange.
Of these 4 indices, Nasdaq has done the best in these initial months of the year. Before the outbreak of the coronavirus emergency, the technological index was on top. From the violent decline, he is currently the only one who has recovered all the losses, having also given less than the others. From the beginning of the year to May 22nd, the Nasdaq 100 gained 7.8%. All the other major indices in the world are in the negative And it is now destined for new records.
The secret strategies to ride the technological index
On May 22nd the Nasdaq Composite finished the session at 9.324 points. On March 23, the day when prices hit the lowest since the beginning of the year, the index closed at 6,860 points. In that session, price recovery began and since then the gain has been 35%.
Last week the price race stopped at 9400 points, an important level because it is close to the gap opened in the session of February 24th. Now, unwritten stock exchange rule is that all gaps are closed, and this too will be closed, presumably this week.
A closure of the Nasdaq above 9,400 points will bring prices to 9,540 points. But the race will not stop because at one step there is the historical maximum recorded on February 19 at 9,838 points, one step from the psychological threshold of 10 thousand points.
The only impediment to the realization of this scenario is some unexpected event (the heightening of US-China tensions for example), which causes the index to close below 9200 points. In that case the prices will drop to 9,000 points and if the race continues they will go up to 8,600 points.