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Nasdaq 100 price breakout furthers outperformance against SP500 and Dow Jones Index peers

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bg_us_flag_usa_america_368721284.jpgSource: Bloomberg
 Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Wednesday 17 May 2023 

Nasdaq100 significantly outperforming SP500 and Dow Jones Industrial Average Indices

17mayusindexperformance.pngSource: IG

The Nasdaq100 continues to be a the outperforming US index by quite some margin in 2023, having gained more than 20% for the year to date. The Dow Jones Industrial Average has by contrast now dipped into negative territory over the same period. The S&P 500 has been lifted by a number of stocks duel listed in the Nasdaq100 as well.

Much of the outperformance of the Nasdaq has accompanied better than expected earnings from major US technology stocks such as Apple, Microsoft and Alphabet, while banking counters which are undergoing a mini-crisis of sorts are weighing on index peers the Dow and S&P 500.

Nasdaq100 – technical analysis trading view

17maynasdaqchart.pngSource: IG

The Nasdaq100 has seen a short-term range breakout realigning the near-term trend with that of the longer-term uptrend currently in place. The longer-term uptrend is evidenced by the 50-day simple moving average (green line) (50MA) trading firmly above the 200-day simple moving average (blue line) (200MA). The price is also trading above both these moving averages to add for credence to long term uptrend assumptions.

The near-term break of the 13290 level, after a short pullback is now being extended. 13730 provides the initial upside resistance target from the move. Traders who are long might consider using a close below the 13290 as a stop loss indication for the trade.

IG Client Sentiment

17maynasdaqsentiment.pngSource: IG

The majority (67%) of IG clients with open positions on the Nasdaq100 Index expect the price to fall in the near term, while 33% of clients with open positions expect the price to rise. The client sentiment indicator represents a snapshot of open positions as of the 10am (GMT) on the 17th of May 2023.

In summary

  • The Nadaq100 is outperforming its major US index peers having gained more than 20% year to date
  • The long-term trend for the Nasdaq100 is up as noted by the 50- and 200-day simple moving averages
  • In the near term, the price has broken out of a rangebound consolidatory environment
  • 13730 is the next upside resistance target considered
  • Most IG clients with open positions on the Nasdaq100 as of the 17th of May 2023 expect the price to fall in the near term
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