At the close of last week's trading session, the Nasdaq composite broke out above the psychologically significant resistance level at 13000.00 and closed at an all-time peak (13105.20). The U.S. technological sector is evidently performing quite well just days before the beginning of the new earnings season.
The appeal for tech stocks has risen over the recent weeks due to the historically low yields in the U.S., which has prompted an upsurge in demand for higher-risk securities.
Given also that the global roll-out of vaccines - yesterday it was announced that over 24 million doses have already been administered internationally - is exceeding all expectations, the underlying market optimism may be here to stay. All of this is likely to support Nasdaq's rally in the long-term; however, there could be an opportunity for contrarian trading in the short-term.
Small corrections tend to develop around significant resistance levels such as the one mentioned earlier, giving the market bears an opportunity to catch such a minor dive. In contrast, market bulls who do not currently have any open buying positions could wait for the price action to reach a new dip before they buy-into the market.
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