2022/04/26 (033) Technical Analysis – NDX

Worse trading session for the Nasdaq
Heavy losses again – it was an another bloodbath day for the NDX.
MSFT numbers above expectations & GOOGL disappointed after Closing Bell!


Heavy losses again – it was an another bloodbath day for the Nasdaq 100

US investors are currently unable to free themselves from their massive interest rate fears. The leading share indices fell again significantly. Tech stocks in particular were sold. On Wall Street, investors bid farewell to the market in a big way today. This continued the erratic course of trading that began with the announcement of higher interest rates by central bank chief Jerome Powell last week. Since then, fears of interest rates and inflation have dominated the stock market. The unclear corona situation in China and the ongoing war in Ukraine were also used on the market to explain the losses.

Worse trading session for the Nasdaq

Meanwhile, highly valued US technology stocks were particularly hard hit. The Nasdaq closed at 12,490, down 3.95 percent on the day. The Nasdaq 100 selection index also fell by 3.87 percent to 13,009 points. Tech stocks are particularly at risk from higher interest rates. This very real fear hangs like a sword of Damocles over the Nasdaq in particular. After the US Federal Reserve (Fed) announced a 50 basis point rate hike at its next interest rate meeting on May 4, investors are now concerned that the Fed could stall the economy with a string of further rate hikes.

What will become of Twitter now?

Yesterday, Twitter in particular caused a stir by supporting the Elon Musk bid and the tech-heavy Nasdaq 100 was up more than the Dow. Investors are now wondering what Musk intends to do with the short message service. Twitter to be delisted after takeover In any case, investors remain skeptical. The share lost around 3.9 percent and, at just under $50, is still far below the offer price of $54.20.

Microsoft above expectations

The mobile working trend has become a driving force for Microsoft. Sales increased in the past quarter by 18 percent to almost 49.4 billion dollars at the end of March, as the world’s largest software company from the USA announced after the market closed. That’s more than analysts had expected. The cloud business even rose 26 percent. Operating profit rose 19 percent to $20.4 billion. Like Amazon and Google, Microsoft is benefiting from the fact that more and more employees, schoolchildren and students have been moving flexibly between the home office and the office since the Corona crisis. For this to work, both companies and private individuals need storage space and applications in the cloud that everyone can access from anywhere. The products and services often come from Microsoft – the home of Windows and teams. Microsoft is no longer only active in the software sector. The US group currently wants to take over the call-of-duty game developer Activision Blizzard for $69 billion. Microsoft stock is up a good 1 percent in after-hours trading.

Alphabet disappointed

Google parent Alphabet disappointed investors with its figures for the past quarter. Sales increased year-on-year by 23 percent to a good $68 billion, as Alphabet announced after the market closed. Analysts had expected a little more. The bottom line was that profits fell from $17.9 billion in the same quarter last year to a good $16.4 billion (15.4 billion euros). Alphabet shares fell by around five percent in after-hours trading. Google’s advertising business – the mainstay of Alphabet – grew 22.3 percent year-on-year to $54.66 billion. At the same time, advertising revenues on the YouTube video platform rose by a good 14 percent to just under $6.9 billion. In the so-called “other bets,” which include the Runaway down gap confirms my fears

For the further course of the NDX, at least in my opinion, the 3 days (from April 6th, 2020, April 7th, 2022 & April 8th, 2020) are groundbreaking. Since after that, if you will, two attempts at bullish recovery failed in retrospect. And thus confirming the overriding medium-term bearish technical chart. So the question arises: 20% correction? Or more?

If NDX is trading at 13411 points and lower, the technology index is per definition in a bear market!
So that long-term oriented investors, and not only medium-term traders, let alone short-term speculators, are allowed to perceive the situation of the NDX anew, analyze it, even evaluate it!?

14.639 (high from 04/06/2022) & 14.307 (low from 04/08/2022) was the trading range from the 3 down runaway gaps.
So I will only give the NDX a yellow light again when we are trading prices above 14,250 points again. I therefore continue to perceive a lower NDX of 14,250 as bearish – and see me, see us, in our bearish trading capability, from 14,500 (from 02/16/2022), confirmed.

Further lower prices up to 12,000 points are still possible. However, nobody has died from taking profits, so that profits can already be realized by 13,000 points.Because I formulated the bearish trading capability in conjunction with the other three long trading capabilities to mitigate our upcoming losses in these 3 positions. Since I’m basically still bullish, at least as far as these 3 stocks are concerned. Should you manifest a trend reversal formation on the chart this spring or summer respectively. And the FED shouldn’t raise interest rates as quickly and sharply as we NDX bulls fear. Therefore, only a green bullish traffic light again, for the entire NDX, should the GAP be closed again – and we are trading prices of 14,750 points and higher again.