A gain of 970% in 11 years and prices on historical highs

The question that analysts around the world are asking is how far the Nasdaq will run. The American technology index is at an all-time high, and is breaking all records. A gain of 970% in 11 years and prices on historical highs. Here is how far the Nasdaq 100 can go. Let’s find out with an analysis by the Projections of Bag Studies Office.

The ten-year bullish phase of the US markets

For this study we take the Nasdaq 100 (NASDAQ-NSX), which is the representative basket of the 100 major shares listed on the entire Nasdaq. And because this is generally the index that is taken as a reference by analysts and serves as the underlying for derivatives.

Index prices have been rising for 11 years now. The gallop of the Nasdaq 100 begins in 2009, in the aftermath of the financial crisis that sees the closure of Lehman Brothers. The strong injection of liquidity into the system by the FED, averted a deep economic crisis and began to push the stock exchanges. Thus, one of the longest bullish cycles of the American financial markets begins, in which they know only 3 phases of correction. The one in early 2016; that between October and December 2018; the recent one of the Covid emergency. In all three cases, the US indices, including the Nasdaq 100, recovered the lost ground in a few months and set new records.

A gain of 970% in 11 years and prices on historical highs. That’s how far the Nasdaq 100 can go

In March 2009, the prices of the Nasdaq 100 hit a low of 1,040 points. Since then they have started an uninterrupted bullish phase that will take them up to the current highs of 11,140 points. A thrilling performance. In 11 years the index achieves 970% in percentage terms. A monstrous average of 88% per year. Anyone who had invested € 10,000 in the index and kept it to date would have earned € 97,000!

How far can the prices of the Nasdaq 100 go? Looking at the graph below on the page you can see a solid black line. It is the trend line that supports very long-term courses. The breach of this line will indicate the end of the secular upturn and a new, long downtrend.

The blue dotted line is the long-term dynamic support. It is important to keep this line under observation. In the last two corrections, that of 2018 and that of 2020, prices have fallen until they meet it, and then start again. A possible next correction will stop only when the prices meet this line.

Meanwhile, the Nasdaq 100 will continue to rise. Even if the slope of the climb indicates that the trend is not sustainable for long at these rates. Maintaining this trend, the index can reach 12 thousand points by the end of August. We identify critical issues at 10,300 and 9,700 points. A possible correction in the next few days can bring prices back towards the first value (10,300). And if this support doesn’t hold, the Nasdaq 100 would drop to at least 9,700 points.

Nasdaq 100 Monthly Chart. Period gen. 2009 – aug. 2020

to know more

There are many Nasdaq stocks that have made astonishing rises. This stock has gained 1,400% since inception. To find out what it is, read who.

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