Facts:
- The US100 is testing its 50-day exponential moving average
- The RSI for the last 14 days has tested the 51-point level
Recommendation:
Long position in the US100 at market price
- Stop Loss: 24,250
- TP1: 25,506
- TP2: 26,000
Opinion:
The recommendation to go long on the Nasdaq-100 (US100) is based on a combination of geopolitical, sector-specific, and fundamental factors that are favorable to the U.S. technology market. In light of rising tensions in the Middle East, investors perceive significantly higher risks for European economies than for the United States. Europe remains more vulnerable to spikes in energy prices and potential trade disruptions, while U.S. technology companies are relatively insulated from the direct consequences of the conflict. As a result, capital is flowing toward the U.S. growth sector, which supports the relative strength of the Nasdaq-100 against European indices.
At the same time, the narrative on global markets has shifted—from concerns about the overvaluation of AI companies to issues related to the energy market and geopolitics. This shift in focus has allowed tech companies to catch their breath from earlier pressure and has provided the impetus for a rebound. Additionally, fundamentals remain favorable—the forward P/E ratio for the Nasdaq-100 is below one standard deviation from the average of recent years, suggesting an attractive valuation in a historical context. With stable earnings growth in the AI, semiconductor, and software sectors, and increasing capital flows toward U.S. assets, long positions in the US100 remain justified both tactically and in the medium term.
Source: xStation
Essential attachments:
Looking at the historical range of the forward P/E ratio (based on 12-month forward estimates) for the Nasdaq-100 index, we can see that the ratio is currently fluctuating below one negative standard deviation of the range since 2023. Source: Bloomberg Financial Lp
