Trade of the week: long NASDAQ 100
The recent correction across major indices has moved the NASDAQ 100 into oversold territory, with the price forming a positive divergence with the stochastic oscillator. IG senior market analyst Shaun Murison reports.
(Video Transcript)
EUR/GBP still a viable trade
Hello and welcome to Trade of the Week. I'm Shaun Murison, senior market analyst at IG South Africa. Recapping on last week's call, my colleague Chris Beauchamp looked at a long position on euro-sterling with a target on the upside of 0.8840, looking at a stop loss of 0.8680.
Now the market has been moving in the right direction. After a brief test, it was getting quite close to a stop loss, but now moving in that right direction, but still far from that target. So that trade is still in play. We're not quite at our stop or at our target just yet.
Tech 100 shows a bullish divergence
Looking at the Trade of the Week for this week, we're looking at the NASDAQ 100 or the US Tech 100, as it's labelled on our platform. This index has recently broken below that 200-day simple moving average (SMA), but to me that's a suggestion that the longer-term uptrend is broken, but it doesn't necessarily assume a new long term downtrend.
At the moment the price is looking oversold, and we do have that bullish divergence marked with the green lines on our chart, so we have the price making lower lows, while the indicator is making higher lows, whilst in oversold period, so we could have a bit of a rebound.
So Trade of the Week is on the NASDAQ or the US Tech 100, with an upside target of $14,565, a suggested stop on a close below the $14,060 level.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
