Feb 15, 2012

Next NASDAQ Target

Technology stocks proved to be most profitable this year. NASDAQ index is trending north with solid gains of 12.53% from the beginning of the year outperforming S&P500 (7.38%) and Dow Jones (5.45%). The reason for this rally is strong earnings season supported with gains from tech giants Apple, Google, Cisco. AAPL represents roughly 11% of total index capitalization and realized 26% return year-to-date.

Technically the triangle consolidation from second half of 2011 has been broken in the beginning of 2012, thus opening way for new bull trend. According to technical pattern when break out occurs in triangle consolidation the subsequent rally should be equal to the triangle height, which in our case is 396.17 points - the correction started July 25th 2011. Given that and the triangle break point (2387) we could easy estimate NASDAQ target of the area around 2800 or some 8.15% up from current level.

Next NASDAQ Target 2800

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