NAS100 Is Regaining Leadership – This Bodes Well For Stocks

  • NAS100

The NAS100 is showing signs of leadership. If it sustains, this will bode well for the risk side of the market, in general.

The index has been heading south since its cycle high in the middle of July (blue dashed vertical), defined by the green down sloping trendline. However, the NAS100 has now bullishly broken above the down sloping trend line. If it closes above, it will be regarded as a bullish breakout.

There are other technical signals which are also positive for the index.

Firstly, last week's candle closed above a bullish reference candle's high (red horizontal line). A bullish reference candle is defined as a candle with the lowest low in at least a three-candle cluster. I.e., the candles to its left and right both have higher lows. That the candle to its right closed above its high completed the bullish reference candle signal. Whilst never a guarantee, this type of candle often suggests higher prices ahead.

Another bullish signal is that the index is trading above its black 30-week EMA and that the EMA is moving in a north easterly direction. If the EMA can hold this trajectory, it will be another bullish development for the index. Lastly the NAS100's weekly RSI has pushed above 50 (green rectangle). This is the bullish side of the indicator and, if it can maintain here, an underlying bullish momentum will be supporting the index.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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