The formerly red-hot Nasdaq-100 has gone nowhere for more than two months as shares of some of its biggest constituents, including Nvidia Corp., Broadcom Inc. and Apple Inc., have struggled.
That was the case again on Tuesday. But there could be better days ahead, with the index NDX on Monday finally flashing a bullish technical pattern that, according to one strategist, signals that the index could be poised for short-term gains.
Katie Stockton, founder of Fairlead Strategies, said in commentary shared with MarketWatch that the index has broken out of a triangle pattern.
"Triangles often lead to strong short-term moves once resolved," she said. The breakout could send the index as high as 27,075, Stockton said, about 5% higher than its current levels. The S&P 500 SPX could get a boost, too, she said.
That would be enough to push the index to its first fresh record high since October. The Nasdaq-100 was trading at 25,684 recently, off 0.3% on the day, according to FactSet data.
Neither the Nasdaq-100, nor its sibling, the Nasdaq Composite Index, have seen a record closing high since Oct. 29, Dow Jones Market Data showed.
The tech-heavy indexes have struggled to push higher due to stalled momentum for Nvidia (NVDA) and several other "Magnificent Seven" stocks like Apple $(AAPL)$, while the software trade has remained weak. At the same time, memory, storage and chip-equipment providers, including Micron Technology Inc. $(MU)$, Western Digital Corp. $(WDC)$ and Lam Research Corp. $(LRCX)$, have racked up big gains that are some of the strongest in the broader market. Shares of Broadcom $(AVGO)$, another tech giant, have also struggled to make headway.
U.S. stocks finished lower on Tuesday, with the S&P 500, Nasdaq-100, Nasdaq Composite COMP and Dow Jones Industrial Average DJIA all retreating.
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