As we pointed out yesterday, the FAANG stocks are trading up against important resistance.
And as you might expect, the large cap tech stock index, the Nasdaq 100, is doing the same thing.
The trend is clearly “up” as the bulls have price heading lower left to upper right. However, it’s run so far so fast that bulls need to be mindful of the potential for a pullback / correction. And that could start if we see continued weakness in tech stocks in February.
Looking at the Nasdaq 100 chart below, you can see the powerful bullish uptrend. But you can also see where price is testing the upper end of the bull market price channel (resistance at point 2). The RSI indicator is also registering 7 year momentum highs. Wow!
At present, we are only 2 percent off all-time highs, so not all that concerning… yet.
But if Tech stocks begin to show extended weakness here, it would be a warning to investors that corrections are still possible (even if we haven’t seen one in a quite a while!).
Nasdaq 100 Chart – Testing upper end of channel
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