NASDAQ Futures Technical Analysis: Overbought Territory

NASDAQ Futures Technical Analysis: Overbought Territory. NASDAQ is the largest index focused on technology in the world. Its components have a combined market cap of more than $10 trillion. They include companies like Apple, Microsoft, Google, Amazon Salesforce.

In the past year, the index has been the best performing as investors move to growth stocks like Facebook and Amazon.

The question among investors now is whether the NASDAQ has more room to grow and if so, by how much.

As you know, some of the companies in this index are the fastest growing in the industry. However, they don’t have any earnings or pay any dividends. For example, a company like Tesla has a market cap of more than $50 billion but since its existence, it has never made a profit. Another company, Amazon has continued to ignore profits and earnings on its quest for growth.

As shown below, the RSI indicator shows the index is completely overbought. It is at a level that hasn’t been seen since 2014.

This week, the index has lost momentum and lost a few points. This is because of news stating that Apple was reducing the target about its prized $1,000 iPhone X.

Apple will release its fourth quarter results on February 1st in what could be an important day for the index. As the most valuable company in the world, Apple could influence the movements of the index this week.

A disappointment from Apple could see the index retrace by about 23.6%. On the other hand, if Apple offers a more rosy forecast, it may push the index higher.

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