Dow Jones, Nasdaq 100, DAX 30 Price Prospects:
Nasdaq 100 Forecast
View: Bullish
The Nasdaq 100 reached new heights last week as stocks such as Tesla, Apple and Amazon built on recent gains. As a major member of the S&P 500, Nasdaq 100 and Dow Jones, Apple has been heavily influenced by the performance of the three major U.S. indices and has gone as far as it – otherwise supporting the otherwise lacking U.S. stock market.
Nasdaq 100 Price Chart: Daily Time Frame (January 2020 – August 2020)
Graph made with TradingView
In addition, the news that the Cupertino, California-based company reached a market capitalization of $ 2 trillion last week, was a scintillating piece of evidence for the growth that has taken place in just a few technological names. To put Apple’s explosive growth in perspective, the company added more than $ 100 billion to its market cap during last Friday’s session alone. Boeing’s total market capitalization is just as shameful at $ 95 billion.
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While the valuation milestone does not do much in terms of direct impact on stock price, it can help feed Bullish sentiment and demand for some of the high-flying FANGMAN members, potentially leading to an indirect boost to their stock prices. However, sentiment surrounding the Nasdaq 100 shares has been a vital force behind the covid recovery and recent price action has not revealed much indication that they will suddenly turn lower.
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With that in mind, it looks like the US indices are looking at the same themes they’ve been up to for months now: Big tech stocks that are getting the most attention and driving gains, while indices like the Russell 2000 flounder for growth and other sectors beyond technical struggle to recover from their initial covid loss.
Dow Jones Forecast
View: Neutral
Considering the seasonal effects on the broader market environment, the Dow Jones may be closely aligned with Apple’s price performance in the coming week. The stock has climbed to the top of the weight list of the index – commanding more than 11.5% of the Industrial Average. With technology in the driver’s seat, price gains at Apple could spark subsequent moves in the Dow as other sectors and Dow components stray into the summer doldrums.
Dow Jones Price Chart: Daily Time Frame (January 2020 – August 2020)
DAX 30 Forecast
View: Neutral
The DAX 30 will wait for German GDP data later this week. After just two weeks ago better than expected data from the UK was released, expectations for Germany may shift and the data may trigger a price reaction as a result. Regardless of direction, the planned event has the potential to inject volatility into an otherwise easy market.
DAX 30 Price Chart: 4 – Hour Time Frame (May 2020 – August 2020)
In summary, global stock markets have shown some signs of excitement over the last few weeks as average real range slips and volume disappears. In the absence of a busy economic calendar, equities can continue to maintain their current range, thanks to their broader technical patterns until a catalyst arrives. In the meantime follow @PeterHanksFX on Twitter for updates and analysis.
– Written by Peter Hanks, Strategist for DailyFX.com
