Nasdaq has been in the midst of preparing a bottom for almost a year, and now a possible breakout might be closing fast despite ongoing banking turmoil and rate hikes. The downtrend was broken in early 2023, and after steadying above the 200-day moving average and making a golden cross, a cup and handle has formed just under the key resistance of 13000. All the dominoes are in place for a medium- and long-term jump, and all that is left is a big and steady breakout. But will it come?
Fundamentally, there are signals showing both ways. Banking stress has not eased yet. Despite market pricing, some FED members still want to hold rates higher for longer and would even hike further if necessary. Other than banking, the overall economy is in better shape than expected. The job market is strong, demand and confidence have not faltered as expected. China’s reopening is going relatively successful, PMI are going to the moon. AI developments and expectations have created a very good story for many tech firms, including hardware providers, software developers, cloud services, and more. That is why Nasdaq could be at the forefront of an uptrend. A good fundamental is there as long as a big banking fail chain reaction does not occur, or inflation does not start to get out of control again. However, the way forward will likely be a little bumpy.
The monthly and weekly close for today will be a key first signal to see if Nasdaq is able to hold above the 13000 resistance. Traders should be careful because it is a strong resistance, and the ground is still shaky.
