The Nasdaq Composite 
IXIC has set multiple new all-time highs in recent weeks, but what does its chart say might happen next?
Let's check it out, starting with the IXIC's year-to-date chart as of Thursday afternoon:
Readers will note that the Nasdaq Composite bottomed out on April 7, shortly after President Donald Trump's "Liberation Day" tariff announcement.
However, the index, which consists of more than 2,500 companies listed on the Nasdaq Stock Market, has pretty much been in rally mode ever since. Can that continue?
Well, the chart above shows what's known as an "inverted head-and-shoulders" pattern of bullish reversal, marked with purple curving lines.
This pattern's "neckline" (denoted by the dotted purple line above) illustrates a pivot at just about 18,029 vs. the record 20,895.66 that the Nasdaq Composite closed at on Friday.
Readers will see that this neckline acted sort of like a springboard when it was triggered back on May 12.
The Nasdaq Comp also took back its 21-day Exponential Moving Average (or "EMA, marked with a green line) in late-ish April, then its 50-day Simple Moving Average (or "SMA," marked with a blue line) on April 30. This presumably forced portfolio managers to increase their long-side exposure.
Next, the Nasdaq Comp retook the even-more-important 200-day SMA (the red line above) during the index's May 12 breakout.
Readers will also see that the index benefited algorithmically in late June what's called a "golden cross." That occurs when a stock's 50-day SMA crosses above its rising 200-day SMA.
Meanwhile, a Raff Regression model (shaded in orange and tan at the chart's right) shows that Nasdaq Composite has stayed with the uptrend in place since its April bottom. And as an old Wall Street saying goes: "The trend is your friend."
Net result: Here we are in mid-to-late July and the index is still trading at or near all-time record highs.
Will it be smooth sailing from here?
Well, there's a lot to consider before saying that. First, second-quarter earnings season has just started, and how it plays out could heavily impact the Nasdaq Composite.
Second, the war of wills between Trump and Federal Reserve Chairman Jerome Powell seems to be a growing issue. And while tariffs have yet to noticeably slow down corporate margins, impact inflation or damage labor markets, there's no way to know if we're out of the woods there.
Meanwhile, the Nasdaq Composite is also facing some less-rosy technical indicators.
For example, the index's Relative Strength Index (the gray line at the chart's top) is now in technically overbought territory. That doesn't necessarily mean the index will sell off from here, but it does mean that investors should be more alert to that possibility.
Also note that the Nasdaq Composite's Moving Average Convergence Divergence indicator (or "MACD," marked with blue bars and gold and black lines at the chart's bottom) is flashing some mixed signals.
The histogram of the 9-day EMA (the blue bars) is running below the zero-bound, which is typically a short-term bearish sign.
That said, the 12-day EMA (the black line) and 26-day EMA (the gold line) are both running well above zero, which is technically positive.
However, while the two lines have been running together for about six weeks now, should the 26-day line cross above the 12-day one, that would historically represent another bearish signal for the Nasdaq Composite.
Add it all up and the Nasdaq Comp's technical picture looks bullish in historical terms.
The above chart appears to signal not long-term weakness, but potential opportunities in both the short- and medium-term future.
That's probably going to remain true until it isn't, right?
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in Nasdaq Composite-related ETFs or mutual funds at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
IXIC has set multiple new all-time highs in recent weeks, but what does its chart say might happen next?Let's check it out, starting with the IXIC's year-to-date chart as of Thursday afternoon:
Readers will note that the Nasdaq Composite bottomed out on April 7, shortly after President Donald Trump's "Liberation Day" tariff announcement.
However, the index, which consists of more than 2,500 companies listed on the Nasdaq Stock Market, has pretty much been in rally mode ever since. Can that continue?
Well, the chart above shows what's known as an "inverted head-and-shoulders" pattern of bullish reversal, marked with purple curving lines.
This pattern's "neckline" (denoted by the dotted purple line above) illustrates a pivot at just about 18,029 vs. the record 20,895.66 that the Nasdaq Composite closed at on Friday.
Readers will see that this neckline acted sort of like a springboard when it was triggered back on May 12.
The Nasdaq Comp also took back its 21-day Exponential Moving Average (or "EMA, marked with a green line) in late-ish April, then its 50-day Simple Moving Average (or "SMA," marked with a blue line) on April 30. This presumably forced portfolio managers to increase their long-side exposure.
Next, the Nasdaq Comp retook the even-more-important 200-day SMA (the red line above) during the index's May 12 breakout.
Readers will also see that the index benefited algorithmically in late June what's called a "golden cross." That occurs when a stock's 50-day SMA crosses above its rising 200-day SMA.
Meanwhile, a Raff Regression model (shaded in orange and tan at the chart's right) shows that Nasdaq Composite has stayed with the uptrend in place since its April bottom. And as an old Wall Street saying goes: "The trend is your friend."
Net result: Here we are in mid-to-late July and the index is still trading at or near all-time record highs.
Will it be smooth sailing from here?
Well, there's a lot to consider before saying that. First, second-quarter earnings season has just started, and how it plays out could heavily impact the Nasdaq Composite.
Second, the war of wills between Trump and Federal Reserve Chairman Jerome Powell seems to be a growing issue. And while tariffs have yet to noticeably slow down corporate margins, impact inflation or damage labor markets, there's no way to know if we're out of the woods there.
Meanwhile, the Nasdaq Composite is also facing some less-rosy technical indicators.
For example, the index's Relative Strength Index (the gray line at the chart's top) is now in technically overbought territory. That doesn't necessarily mean the index will sell off from here, but it does mean that investors should be more alert to that possibility.
Also note that the Nasdaq Composite's Moving Average Convergence Divergence indicator (or "MACD," marked with blue bars and gold and black lines at the chart's bottom) is flashing some mixed signals.
The histogram of the 9-day EMA (the blue bars) is running below the zero-bound, which is typically a short-term bearish sign.
That said, the 12-day EMA (the black line) and 26-day EMA (the gold line) are both running well above zero, which is technically positive.
However, while the two lines have been running together for about six weeks now, should the 26-day line cross above the 12-day one, that would historically represent another bearish signal for the Nasdaq Composite.
Add it all up and the Nasdaq Comp's technical picture looks bullish in historical terms.
The above chart appears to signal not long-term weakness, but potential opportunities in both the short- and medium-term future.
That's probably going to remain true until it isn't, right?
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in Nasdaq Composite-related ETFs or mutual funds at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.