This article is written exclusively for Investing.com
For the past few days, US technology and growth stocks have underperformed, with investors opting for racer value stocks – those stocks that tend to rely on economic growth. But after Thursday's bullish price action, the tech sector could rebound as yields, including in the Treasury, have plummeted amid lenient comments from several Fed officials who quelled speculation about monetary tightening amid rising inflationary pressures .
On Thursday, it rose to a record high as more economic signs of an improving economy surfaced, with unemployment benefits dropping to a new pandemic low last week. But this did not prevent the tech-heavy from making a nice comeback. Investors will keep an eye on today's monthly magazine, which is expected to reveal that about 1 million non-farm jobs were added in April.
The key question is whether NASDAQ will be able to expand its earnings even if current job data sells off in the bond market and causes interest rates to pick up again?
Remember that rising interest rates in the recent past was not a good sign for the overburdened tech sector, so make sure to pay extra attention when trading the NASDAQ or tech names today
But like As the graph above shows, the NASDAQ has managed to keep key support just below the 13400 area (shaded in blue), which was previously resistance. Not only did this area provide support on Thursday, but the sharp sell-off ended on Tuesday as well. In other words, the index has formed a double bottom here, suggesting that we may see further gains in the technology sector.
Unlike the Dow, which closed at a record high as value stocks rose, the NASDAQ is still more than 3% below its all-time high around 14064. On the way to that goal, there will be some levels that monitoring is needed, including the area shaded in red, between 13700 and 13765. This was the last support area prior to this week's outage. Once supported, it can turn into resistance on a new test from below. Additionally, this is where the 21-day exponential moving average comes in as well, making it a technically important zone.
But given the double bottom formation and as the bullish trendline was, not to mention that the long-term trend is bullish, I would say the index is more likely to break through the above resistance zone. a sharp rejection there to send us to new weekly lows.
Still, if you're trading NASDAQ or tech stocks today, it's well worth keeping a close eye on that potential area of ??resistance. If and when this zone is cleared, we could see the index running towards and possibly past its all-time high.
