Nasdaq (NDX NQ1 QQQ) Follow the leader, Nasdaq remains bullish as FAANG leads the way

• Nasdaq breaks more records on Wednesday as the index outperforms all others.
• Thursday sees a positive start with futures up 0.6% in early trading.
• Market breadth remains low as big tech leaders lead the way.

The Nasdaq has taken over a leadership role in the equity indices space as markets overall remain strongly bullish amidst the highly accommodative Fed policy. The buy the dip strategy has proven once again to be the only show in town and with monetary policy this accommodative why not? 

Market breadth remains a cause for concern with the number of stocks above their 200-day moving average well below peak and stocks making new highs also well below peak, though both have bounced this week. What we are seeing however is a strong surge led by the strong stocks. Big tech and FAANG names continue to lead the way, GOOGL and FB made new record highs this week and Apple finally showed some strength and broke out of its slumber, see here. Tesla staged a powerful break of the $635 level we identified on Wednesday, see here.

Nasdaq (QQQ NQ) stock forecast

Using the futures contract which mirrors the Exchange Traded Fund (ETF) the Q's (QQQ) shows the continued strong uptrend holding nicely. Fridays buy the dip in the Dow and S&P 500 was not exactly a dip here as the Nasdaq has taken over the leadership role. The 9-day moving average is the perfect foil, guiding the trend higher and as long as we remain above this the risk reward remains skewed to the upside. The Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), and the Commodity Channel Index (CCI) are all trending higher thereby confirming the price action. Support remains from the previous record high period in April/May at 14,053 as this corresponds with the lower end of the trend channel. Below that 13,800-13,700 is a high volume zone and 13,462 the last buy the dip support zone. 

The Relative Strength Index (RSI) does look to be heading for overbought regions so keep a close eye on this one.

The hourly chart below gives us some more detail and shows that a break of 14,250 sees a bit of a volume gap beneath so the price could accelerate to 14,130 if this breaks. 120 points not much, but good enough for some intra-day scalping if it works out.