NASDAQ-100 Weakens Further: A Price Chart Analysis

AppleAAPL
, MicrosoftMSFT
and AmazonAMZN
are the 3 biggest components of the NASDAQ-100 Index and it’s been months since any of them have seen higher highs. Investors want those higher highs as it indicates upward trend and lack of it suggests the unpleasant opposite.

The NASDAQ-100 reflects the direction of these 3 majors and it contains and measures the movement of many tech and social media companies. There’s a definite lack of boring, mature names that you find in the Dow Jones Industrial Average such as General ElectricGE
and General MotorsGM
.

The index is closely watched as a general indicator of the ability of growth stocks to keep that growth going. With low interest rates that made it relatively easy for such firms to establish themselves as the new wonders of capitalism. Now that the Fed is pushing higher rates, the NASDAQ-100 magic is wearing off.

Since it’s the largest component of the index and because it’s the largest holding in the Berkshire HathawayBRK.B
fund run by Warren Buffett and Charlie Munger, here’s the daily price chart for Apple:

More selling than buying is keeping Tim Cook’s giant tech company from heading higher. The August peak came just before Fed Chair Jerome Powell made his hawkish remarks about interest hikes during the Jackson Hole, Wyoming retreat. The stock has been unable to regain the old momentum since then.

Take a look at the daily price chart for the NASDAQ-100:

Today’s closing price, at the low end of the daily trading range, takes it back below the 50-day moving average. The 200-day moving average is moving relentlessly lower as the NASDAQ-100 is unable to reach that level for months now. Whether the mid-October low holds is the question.

Here’s how the weekly chart for the NASDAQ-100 looks:

It’s obvious that the peak came in late 2021 at about 16,500 and that it’s dropped since then with the occasional short-lived rally. At the current price of 11,345, the index has declined from that high by just over 31%.

The 50-week moving average turned over in the March/April, 2022 and is headed downward. The NASDAQ-100 is having trouble staying above the 200-week moving average for more than just a few weeks.

Here’s the monthly chart for the NASDAQ-100:

You can see how well growth stocks can do when the interest rates stay low and the Fed is accommodating. The top is clear at the beginning of 2022 when that factor began to be called into questions. The monthly drop manages to remain above the 50-month moving average.

Those expecting a Santa Claus rally may be disappointed this year as the tech sector is not yet feeling the holiday spirit.

Not investment advice. For information purposes only.