Nasdaq (NDX NQ1 QQQ) breaks records as Fed threads a careful line, risk-reward still upside bound


  • Nasdaq outperforms all and sets new record high on Thursday.
  • Relief rally as Fed is seen to be in control of inflation with rate hikes brought forward.
  • Big-tech FAANG stocks get ready for big moves.

The relief rally continued on Thursday for the Nasdaq as the index outperformed all others and set a new record high on the day. The Fed has calmed investor fears over runaway inflation by bringing forward its rate hike predictions to 2023. Not only has this calmed investors but the 10-year yield remained barely unmoved despite talk of tapering and rate hikes in 2023. 

Big-tech stocks made some strong moves on Thursday with Apple (AAPL) finally breaking out and Facebook (FB) closing near the high of the day and just below its record high. 

Nasdaq technical analysis

Taking a close look at recent price action using the 30-minute chart for the Nasdaq futures (NQ1) shows just how much volume printed toward the high of Thursday's session. The point of control was at the near high of the day. 

From the daily chart, we can see the strong ascending channel which has been holding the move nicely. The break of 14,053 was the key to further gains and then Thursday's record. Holding above this level keeps the short-term trend bullish with 13,462 and 12,950 the medium-term and longer-term pivots for bulls. 

In terms of metric, bulls continue to have the upper hand. Across the Nasdaq, 49 stocks made new 52-week highs as against 28 making new 52-week lows while 74% of Nasdaq stocks are trading above their 100-day moving average.

The risk-reward is to the upside, trading above the 9-day moving average, strong ascending channel, intraday point of control (max volume price) near the high of the day.

 

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