- Summary:
- The Nasdaq 100 Index is on a strong momentum thanks to the hot streaks by the tech industry and bird flu-fueled healthcare stock gains.
The Nasdaq 100 Index extended closed with gains of 0.99 percent on Friday to hit 18,808.35 points. US markets closed for business on Monday as the nation celebrates Memorial Day, with the Index marking five consecutive weeks of gains. Furthermore, it has maintained an uptrend in May, with its gains this month totaling 8.2 percent as of this writing.
The tech-heavy index has been spurred on by the upbeat sentiment around the performance of the technology industries, amid the AI-driven hype. NVIDIA’s record-breaking returns released last week, as well as Qualcomm’s impressive presentation at the Microsoft Build 2024, have sent strong signals that the tech industry still has more fuel in the tank to keep rising despite concerns that some stocks could be overvalued. Among the large-cap companies, Apple has gained 11.5 percent in May, Meta is up by 11.1 percent, Microsoft has gained 10.4 percent, Google (Class C) has added 7.1 percent and AMD is up by 5 percent.
Meanwhile, healthcare stocks, which constitute about 7.1 percent of the Nasdaq 100, are likely to continue their scintillating run after last week’s massive gains driven by sentiment around the avian flu vaccine. European nations and the United States have upped their surveillance and preparedness for a potential spike in avian flu infections, raising prospects of bulk vaccine orders. The H5N1 flue was detected in two US citizens and cows last week, while Australia detected its first human infection in the last week.
It has been widely reported that farm workers are likely to be initially targeted for mass vaccination to prevent further spread, much as no human-to-human transmission has been reported so far. Moderna and Pfizer/BioNTech are already in talks with the US government on clinical shots rollout. Moderna stock has risen by 51 percent in May, including a 25.3 percent gain last week. Also, BioNTech gained 7 percent last week, while Novavax rose by 19.1 percent. The upbeat sentiment around the tech and healthcare industries will likely keep the Nasdaq 100 Index on the uptrend this week.
Technical analysis
The momentum on Nasdaq Index signals a continuation of the uptrend, with the RSI indicating that the buyers are currently in control. The uptrend will likely continue if the Index stays above 18,780.83, and the first resistance will likely be at 18,839.51. A continuation of control by the buyers will likely break the resistance, and potentially send the Index higher to test 18,907.98. Alternatively, the sellers will likely be in control if the Index slides below 18,780.83. That will find support at 18,712.36, but a continuation of that control will likely break that support and invalidate the upside narrative. Furthermore, that could result in further declines to test 18,640.63.
