The Indexnasdaq:.Ixic is the Nasdaq Composite Index.
There are approximately 3000 common equities on this exchange.
The index essentially includes various types of securities.
From ADRs to REITs and many limited partnerships, the range is quite huge.
The Index includes Nasdaq listed stocks, and are not derivatives.
The Indexnasdaq:.Ixic is on track to make some significant gains.
The Index has breached the 7482 levels in mid-March 2018.
The level is indicative of some key technical trends in the market.
The Indexnasdaq:.Ixic has found support below the 52-week high.
On a 1-year basis, the Index yielded over 26% gains.
YTD, the Indexnasdaq:.Ixic is up well over 8%.
The charts indicate a key level and support point as well.
It has posted some unprecedented gains over the past few months.
In the group of major US Indices, this Index has delivered some unique returns.
It has posted gains in almost all the 11 out of 12 months.
The question then is whether you need to buy the Indexnasdaq:.Ixic at current levels?
The price analysis is crucial because it creates some key parameters.
The most important consideration is undeniably the future of the technology space.
This is important because the Indexnasdaq:.Ixic is heavily dependent on tech stocks.
In fact, the surge that we have seen in recent times is also on the back of technology stocks.
But the question is how long will the upmove continue?
Is it time to book profit or invest in a new position?
Well, it depends on a series of factors that determine the trends in the market.
After all, this is not about a single stock but entire Index.
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The RSI Push
The Indexnasdaq:.Ixic is well below its 52-week highs of 7637.
The current price shows support level below this psychologically important mark.
The question then is what is the analyst call on Index?
Well, the first and foremost indicator is undeniably the RSI.
RSI stands for Relative Strength Index.
It stands for both a measure of volatility and relative strength.
So according to current levels, it is around 54.
This shows that the Indexnasdaq:.Ixic is neither oversold nor overbought.
It is currently at a comfortable mid-point.
That means the relative resistance at this level is limited.
At the same time, it is also a fairly reasonable buy at current levels.
The overall return potential is still not exhausted at current levels.
Investors have to remember that RSI measures on the basis of speed and direction of prices.
It is, in fact, one of the most popular technical measures to assess market gains.
It clearly encapsulates the relative gain and overall price trend going forward.
Essentially it is computed using the average loss and average gains.
The value of this Index moves in a range of 0-100.
In case, the valuation stays above 70; then the particular counter is overbought.
However, if the same entity has a reading below 30, it is oversold.
But if the reading is maintained between these two crucial levels, it indicates stable readings.
Therefore, at 54, the Indexnasdaq:.Ixic is stable now.
It shows that investors can clock in reasonable gains without a huge risk.
This is a very important indicator and one of the first signs of potential danger.
The market has to be mindful of the associated risk and possible dangers.
But the current levels indicate that the Indexnasdaq:.Ixic is in safe zone.
Rally in Technology Sector
The other big factor why it makes sense to invest in Indexnasdaq:.Ixic is the future scope.
The technology sector is poised for rapid growth in 2018.
The recent study by Gartner indicates that the worldwide spending in the sector is rising.
The projected global spending in 2018 is likely to inch closer to $4 trillion.
This is supposed to at least 4% higher from the 2017 estimates.
The 2017 global IT spending was closer to $3.5 trillion.
This indicates the scope of growth is much higher.
Moreover, it also indicates that the demand will continue to grow.
The rapid advancement in technology coupled with increasing innovation is the primary catalyst.
Growth in high demand sectors like Artificial Intelligence and Augmented Reality is likely to continue.
This means there will be an advancement in creating a variety of devices as well.
ADAS or driver assisted systems, as well as automated cars, are seen as future growth triggers.
The study indicates that these advancements will push companies to innovate further.
The recent regulatory moves are seen as another major positive trigger.
It is supposed to provide a multi-pronged incentive to technology companies.
It provides them a monetary as well as demand-driven advantage.
Furthermore, it will help improve earnings and also help them enhance their margins.
This is because the technology sector will benefit directly from recent tax reforms.
This means the companies will be able to save significantly from new initiatives.
At the same time, it will help them to utilize the savings for more innovation.
So margins and sustainability are both addressed altogether.
This will also enhance the upgradation in the technology space as well.
Needless to mention that Indexnasdaq:.Ixic will be a direct beneficiary of the move.
So investing here makes complete sense.
The Most Diverse Technology Presence
Given the wide rally in technology space, the Indexnasdaq:.Ixic provides strong growth options.
The Index comprises of over 3000+ stocks.
This covers a broad range of opportunities across the technology sector.
Needless to mention then that the Index helps you to take up most broad-ranged industry-specific play.
It just does not cover a wide range of technology and internet plays but related opportunities too.
This includes a gamut of financial and banking services too associated with the technology sector.
This means if you want to take advantage of the gains in the tech sector, this Index provides the best scope.
In one go, you can play on some of the most diverse range of options in a given space.
The most important factor is this acts as a unique insurance system too.
You get exposure to the various elements in the technology sector.
From hardcore technology play to distinctly unique beneficiaries of technology, you get exposure of all.
The 3000+ stocks also ensure heavy volume trading.
Needless to mention that this usually perks up the overall returns in a comprehensive fashion.
Moreover, this is one index that has sustained considerable gains over a long time.
It also has one of the largest numbers of foreign listings.
Therefore, in many ways, this index helps investors to adopt a far more global play.
You are just not exposed to a variety of US stock indices, but also a variety of global technology plays.
That means as a technology sector investor, the Indexnasdaq:.Ixic gives you a global exposure.
Wherever in the world, there is a development in the technology sector, the Indexnasdaq:.Ixic helps take advantage of it.
So you are better poised to take challenges.
It also helps spread out your returns in an even fashion.
Invest in Technology Index
So the option is to either invest in individual technology stocks or the Index.
But that is only possible if the Indexnasdaq:.Ixic can deliver better returns.
The recent run-up in the Nasdaq Index highlights relatively interesting growth prospects.
The Indexnasdaq:.Ixic recently completed a superb week-long profit run.
This was, in fact, the longest run-up by the Nasdaq since October 2017.
In a matter of seven days the Indexnasdaq:.Ixic gained over 5%.
The last time Nasdaq clocked this type of gain was in February 2014.
But if you follow technical cycles, such huge run-up is followed by a cool-off period.
But such concerns are significantly low-key at the moment.
In 2017 alone, Nasdaq has recorded 5 instances of 7-day winning streaks.
If you compare this with the record in past 10 years, this is distinctly unique.
From 2013 to 2016, there has been only one instance of such 7-day winning streak in a year.
Before 2017, only in 2011, there was an instance of Indexnasdaq:.Ixic surging almost 7% in 7 days.
Not just that there was something even more outstanding about the recent 7-day run-up.
The Index was higher than average on the eighth day compared to the past few times.
Historical data throws up many other interesting data.
On an average, three months after this kind of run-up you see the 7-day average return, there is a sobering phase.
But you can expect this in any kind of up-cycle.
But the big advantage in this is all those who missed out on a rally earlier get the opportunity to enter.
This means the Indexnasdaq:.Ixic gains have set it up for the sustained rally.
The hope is on an average the Index returns will be significantly higher.
That builds the case for a distinct upmove.
Bulls in Control on Wall Street
There is another reason why investing in Indexnasdaq:.Ixic makes sense.
At the current instance, you can see that the Index is poised for growth.
On an average during the course of any Bull run, the Index generates a far higher return.
Compared to individual stocks, the overall returns from the Index is more sustainable.
The political climate is more conducive towards a series of tax-related changes.
If you see despite all the changes, most Indices are trading close to their highs.
This means the overall market is firmly in the grip of the bulls.
Along with that, you have seen the technology space, in particular, is clocking significant gains.
The way the market reacts to any news is most important.
It goes on to highlight the overall sustainability of the gains.
The highs that the indices hit in 2018 will be there fresh highs.
So in many ways that are the new resistance levels to watch out for.
Therefore, the writing is quite clear on the wall, the next Bull Run is here to stay.
Needless to mention that technology stocks are likely to lead the bull charge.
This is coupled by a huge change in global technology changes.
Moreover, the current technical trends point to the rally to be relatively sustainable.
This is a big incentive to the overall investment climate.
In this context, tech also acts as an investment safe haven.
The future developments are all heavily technology dependent.
As a result, the Indexnasdaq:.Ixic provides significantly more holistic opportunities.
They also point to more sustainable scope for utilizing gains to investor’s advantage.
As a result, it makes sense to invest in Indexnasdaq:.Ixic.
However, you must look at the valuation perspective and identify entry points correctly.
Indexnasdaq vs. Peers
However, if you have to invest in the technology sector, it cannot be just based on benefits.
There also has to be sufficient reason why it is a better opportunity than other sectors.
If I am suggesting that Indexnasdaq:.Ixic offers significant return prospects, you also have to ask for comparative numbers.
Only after proper comparison, you can assume that the Nasdaq Index provides the most definitive return option.
In fact, that brings us to a good opportunity to analyze the relative performance of Dow & S&P 500.
If you compare the three indices on one platform, there are obvious differences.
You can easily identify these and take a call on the future prospect.
So far in 2018, the Indexnasdaq:.Ixic has been the best performing Index.
If you assess the changes in inflation-adjusted levels, it is up over 8%.
Compared to this stupendous gain, the S&P 500 seems to be rather muted at 2.8%.
The Dow seems completely static at less than half a percent gains.
But you have to also take into consideration, the triggers for the gains.
The Indexnasdaq:.Ixic has seen one of the largest capitalization of the technology opportunities.
Both in terms of hardcore technology gains as well as distinct internet plays, there is a commendable upward swing.
The technology sector has recorded over 10% gains on an average in the past year.
Individual stocks have seen loss to 50-60% rallies as well.
Moreover, this is one sector that has escaped the market volatility to a large extent.
This is mostly because the tax reforms are beneficial for this sector.
As a result, it has escaped the turmoil that you see in the rest of the stock market.
So the Indexnasdaq:.Ixic is also acting as a cushion against future uncertainties.
Brokerages on Indexnasdaq:.Ixic
However, no brokerage view is complete without proper reference to brokerages.
While fundamentals are one aspect of the game, brokerages help put the final perspective.
They help you understand the various developments and take a balanced view.
Most importantly brokerages highlight both sides of the coin.
Often in our rush to create a meaningful investment portfolio, we miss out these details.
Therefore a brokerage view also acts as a sobering factor in case of an euphoria in sentiment.
This is what can keep potential bubbles from getting created.
In many ways, the brokerage views provide finality to the overall investment.
So what are brokerages suggesting?
How are key market experts reading the phenomenal gains in Indexnasdaq:.Ixic?
Well, there is a huge segment which calls for a strong sell on the Index.
This is primarily a mode to book profit.
This will help investors save a percentage of the sudden gain in the Index.
On the while, you can consider this gain to be one of the best rallies, so profit booking is no doubt an approach.
However, there is another segment that highlights that the Nasdaq beat the best bluechips in 2 years.
In fact Indexnasdaq:.Ixic may go on to hit even higher highs going forward.
It can well double the average one-month return too.
So, it make sense to wait and watch over the short-term.
Therefore, short-term is the keyword when you are considering Indexnasdaq:.Ixic.
Over the long-term market, indicators do signal a reversal.
In other words, the Dow may play catch-up, or the Nasdaq rally may cool off some bit.
The Nasdaq anyway tends to ease after a three-month run-up.
But if you are thinking about the longer term, this may become your opportunity to increase exposure.
There is no point in running away from technology in the longer-term.
Our growth is increasingly linked to technological advancement.
Therefore, any bet on future needs to be heavily invested in Indexnasdaq:.Ixic.