Nasdaq is surging, big. After the breakout of the 2022 downtrend and the 13,000 resistance, Nasdaq is enjoying huge gains with the help of the AI rally and surging Tesla. The economy has stayed strong despite the Fed’s tightening, and banking risks are subdued for now, while a possible debt ceiling crisis has been averted. While the risks are decreasing, the AI sector is booming, with ChatGPT’s success fueling the AI, semiconductor, and data center sectors. However, the stronger-than-expected economy and subdued banking risks could lead to additional rate hikes. The newly added risks from the FOMC dot plot and the incredible upward move without any correction might trigger some profit-taking actions.
Nasdaq is near the upper line of the uptrend channel and is testing the March 2022 top at 15,275. The first attempt at the resistance was rejected with a 124% larger volume than average. Such volume surges usually signal a short-term trend change. If Nasdaq can’t break 15,275 and closes below its 10-day moving average, a short-term mini correction could begin. Possible targets for a correction could be 14,600, 14,200, and 13,530, depending on the severity of the downward move. However, the uptrend is still ongoing, and as long as Nasdaq stays above the 13,000 support, any downward moves could create buying opportunities. And, of course, any breakout above 15,275 could further extend the already booming returns of Nasdaq.
