The NASDAQ Composite index experienced a significant surge this week, gaining 1.40%, as a rise in market risk appetite and institutional readiness for the upcoming earnings season triggered a positive trend. The recent formation of a second higher high and a third higher low by the NASDAQ has caught the attention of technical analysts, who suggest a potential bullish trend for the index. Economists also forecast a robust performance for the NASDAQ in the second half of the year.
The bullish sentiment intensified during yesterday’s trading session due to positive employment data. Contrary to expectations, the JOLTS Job Openings data revealed 180,000 more vacancies than anticipated, indicating a balanced employment sector that is strong but not inflating wages or inflation significantly.
The positive sentiment was further boosted by remarks from Federal Reserve Chairman Jerome Powell, who suggested that recent data points to a return to a disinflationary path, despite earlier reports of high inflation in 2024. However, economists caution that rising oil prices, which surged by 8.40% in June 2024, could prolong inflation if prices remain around $85 per barrel.
Despite potential inflation concerns, investors are increasingly focusing on the upcoming earnings season, which kicks off on Friday, July 12th, with activity picking up from the 17th. On Tuesday, 75% of NASDAQ stocks and 83% of its most influential stocks saw value appreciation.
As of now, the NASDAQ exhibits buy signals, trading above the 75-bar Exponential Moving Average (EMA) and the Volume Weighted Average Price. Oscillators indicate buyer control, but technical analysts are keeping a close eye on the index for sustained momentum. Key breakout levels are located at $20,036.03 and $20,045.64, with the NASDAQ’s all-time high being $20,128.31.
