Nasdaq Forecast: July 2020

Robert Petrucci

The NASDAQ Composite Index posted solid gains in June and outperformed the Dow Jones and S&P.

After stumbling hard in mid-March to lows around 6650.00 the NASDAQ Composite has powered higher steadily with strong gains. The index has made solid positive moves upward during the month of June and has outperformed the Dow Jones and S&P indices. The NASDAQ began June near the 9460.00 level and then started to gain, but it hit a major road bump in the middle of the month and sank to lows near the 9,400.00 juncture. However, after putting in a sizable decline mid-June, the index found buyers again and it is now approaching important resistance levels.

The resistance levels for the NASDAQ Composite Index should be looked at carefully, because they are not ordinary resistance levels. The value of the index is actually testing all-time highs. The mark of 10,200.00 should be watched closely because this was the high made around the 23rd of June. If risk appetite remains steady in July there is reason to suspect the NASDAQ will continue to test new highs.

Speculators should take into account the notion that trading is never a one way street, particularly when they are using leverage and volatility emerges. The NASDAQ is not immune to sudden bursts of volatility and if risk sentiment takes a hit the index has proven it is capable of plunging rapidly. Coronavirus concerns continue to make news and the total impact on the US economy is not easily calculated. While it may be foolhardy to advance the notion that many of the companies listed on the NASDAQ lean towards the technology and software sectors, perception helps generate plenty of positive sentiment even if facts are not completely true. The underlying notion that NASDAQ listed equities can withstand the global downturn better than others should be taken into consideration.

Support for the NASDAQ is around the 9,700.00 mark and if this level is brushed aside and the index loses value another clear line is the 9,600.00 juncture. However, speculators looking to sell with short positions should only consider shorting the NASDAQ if a sudden downturn emerges and risk sentiment shows signs of a trend which is longer than two days, in my opinion.

Selling can certainly become a dominant feature, but the NASDAQ has proven over the past few months that it has a bountiful amount of willing buyers. If support levels get touched and you have the fortitude to take a buying position for the NASDAQ while using good risk management, you might find you are not alone with positive upward sentiment.

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Global risk sentiment certainly remains fragile, but the NASDAQ has been the home of adventurous speculation for a long time. While its current values may look expensive it may prove foolhardy to wait for a retreat in values. Certainly a trader can wait for downturns to enter buying positions below current market value, but the trend as they say ‘is your friend’. June has produced solid gains for the NASDAQ and if bullish behavior remains strong in global indices there seems to be a fair chance the index will be leading the charge upwards. The opportunity to buy the NASDAQ for a speculative trade upwards may be now.

NASDAQ Composite Index Outlook for July:

Speculative price range: NASDAQ Composite Index 9,400.00 to 10,400.00

Support at 9,600.00 could prove worthwhile, but if shattered the NASDAQ could fall to 9,400.00

Resistance at 10,100.00 is a short term target, but if a strong upward trend emerges the NASDAQ might test the 10,400.00 juncture

Nasdaq

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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