In The Big Picture each month, we look at where the market could heading next. This post is an extract from our January 2014 edition. To download a sample copy please just click here.
NASDAQ Composite’s 4000 price level becomes an area of supportIn December's edition of The Big Picture we reported that on Tuesday 26th November the NASDAQ Composite broke through the magic 4000 level on average trade, signalling that institutional investors were buying (Point F).
We also said that the US technology indexes next job was to stay above 4000 and that ideally 4000 would change from a level of resistance into a level of support. The good news is that after numerous ‘tests’ (Point G) the support at 4000 held firm. It was also good to see it successfully test its all important 50-day moving average (Point H).
NASDAQ rapidly approaching long-term resistance at 4200Take a look at this 20-year chart of the NASDAQ Composite and you can see that between July and September of the year 2000, the US technology index had trouble getting back above the 4200 price level (Point I). Therefore we think that it will probably come up against a headwind very soon and also encounter fierce resistance at the point it topped out back in March 2000 (Point J).
This information is taken from The Big Picture, to download a sample copy please just click here.
As always, if you have any questions or thoughts on the points covered in this post, please leave a comment below or connect with us @ISACO_ on Twitter.
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* November 15th 2012: Internal estimation of total ISA and pension assets owned by ISACO Investment Team and ISACO premium clients.
** Long-term performance: December 31st 1997 - December 31st 2013 ISACO 91.3%, FTSE 100 31.1%. 5 year performance: December 31st 2008 - December 31st 2013. ISACO Investment performance verified by Independent Executives Ltd.