Asset Watch
Thursday, July 7, 2022
Although the NASDAQ Composite has declined by more than 28% this year and has underperformed the S&P 500, could a rotation be underway?
The NASDAQ Composite’s 175 and 200-week moving averages have saved the day since 2011. So while the index dipped below both levels during the COVID-19 sell-off, it rallied soon after. The NASDAQ Composite also fell below its 200-week MA intraweek for the period beginning on Jun. 13 but managed to close the week above it. Likewise, the intraweek decline beginning on Jun. 27 also saw support materialize at the 200-week MA.
Therefore, with the index sandwiched between its 175 and 200-week MAs, support and resistance are present between 10,846 and 11,355.
However, with the index closing at 11,322 on Jul. 5, will the great rotation propel the NASDAQ Composite above its 175-week MA sooner rather than later?