Predicting Nasdaq Outlook - Trading Journal (11.17.20)

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A chart comparison caught my attention is the comparison of Nasdaq between 1997 and where it is today in 2020. It got my attention because the underlining fundamentals are supporting the chart's prediction. First the FAANGM stocks have limited move to the upside ever since the recent vaccine news. Most of the gains have been from small caps and companies where it was hit hard by Covid. Now that has pass the questions of where prices go from here is anyone's guess.

Yet high evaluation and expectations across the tech industry is lead by FAANGM as they have a large share of the market's total cap. With more stocks being bought there is less to go into FAANGM so once the darlings of Wall Street may likely now be history. This is not to predict they will fall but rather have less gains along the way as the remainder of the market continue to rise.

2020 we have seen some amazing price movements that one could say are generational. The massive rotation last two Mondays out of tech and into small caps could not be ignored. There could potentially be more of these days ahead which is another reason FAANGM and in general high growth tech stocks could remain in consolidation mode.

On the bright side the chart prediction is only spanning a few months. As 2021 moves forward it does predict Nasdaq will eventually move higher and if it is any positive note the 1997 moved toward what became an amazing rise up for Nasdaq. This could potentially happen again in 2021 with Nasdaq again.

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