Nasdaq 100 (NDX QQQ) back in lead as top of trend channel already in sight
|- Nasdaq 100 stalled on Wednesday as Dow and S&P 500 rallied on.
- Thursday sees futures back on track for more highs.
- Relative Strength Index remains overbought.
The Nasdaq 100 remains in the leadership position among indices, having staged a powerful second half to June. The index is up 6.5% for the last month or 13% year to date, lucky for most investors compared to a zero rate world. By comparison, the Dow is down slightly over the last month, but the year-to-date performance is similar at 12.7%. The S&P 500 is the winner for investors so far in 2021 with a 14.4% gain year to date.
The spread between the large-cap indices and the Russell 2000 continues to widen as the Russell registered a gain of only 0.5% for June and 3.8% for the quarter. We have identified a worrying potential triple top in the Russell and would like to see a range breakout to eliminate this. See more here.
Nasdaq (QQQ, NQ) forecast
The onward march continues though, and the upside of the recent channel is now in sight, far quicker than thought. This sets the upside resistance target at 14,750. Again as previously mentioned, we are using the E-mini Nasdaq contract for our analysis. The QQQ ETF will be a mirror image. The trend is strong as confirmed by the gap to the 9-day moving average being extended. Is this overextension? Well, the Relative Strength Index (RSI) certainly seems to think so, as it has sat in the overbought zone for the last two sessions. Interim short-term support is at 14,400, close to last week's high and the 9-day moving average. Below that the bottom of the channel at 14,210 comes into view. 13,830 is a small double bottom from June 16 and 17 and an area of high volume as the volume profile bars on the right of the chart show. High volume areas should mean strong support.
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