Investment World
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Commentary
Nasdaq: Uptrend to continue
B. Krishnakumar
AFTER passing through a rough patch, the sentiment at the US bourses was particularly bullish during the week gone by. All the three-benchmark indices logged significant gains for with the broad based S&P 500 recording the highest weekly gain since September.
The flow of improved economic data and positive comments from the Fed Chairman boosted market sentiment. Stocks gained ground on Friday after the Institute for Supply Management said its index of manufacturing activity rose to 54.7 last month, from 49.9 in January.
As anticipated last week, there was a recovery in the Nasdaq Composite Index. Aided by the bullish undertone, the index reversed its four-week losing streak. It logged a weekly gain of 4.5 per cent. The Dow Jones Industrial Average recorded a gain of four per cent and the S&P 500 surged 3.9 per cent for the week.
Going by the recent price action, the ongoing rally is likely to be extended to the ensuing week as well. On the upside, the immediate resistance for Nasdaq Composite Index is at 1860-1900 range.
From a slightly longer-term perspective, the outlook for the index continues to remain weak. Only a move past 1950 would warrant a re-look at the earlier bearish outlook. Till such time, any up move would continue to be treated as a correction within a bear market.
(Note: The analysis and opinion expressed in this column is based on the technical analysis of the past price behaviour. Analysis and price targets are based on Elliott Wave and Point & Figure techniques. There is a risk of loss in trading)
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