The price action of the Nasdaq composite bounced back up from a recent dip, giving investors a glimmer of hope that the correction may finally be over. While this pullback does not necessarily signify a complete bullish reversal, the underlying setup may be favourable for the implementation of trend-continuation strategies by bulls seeking to join the market before the price action re-enters into uncharted bullish territory.
The comparatively uneventful economic calendar for this week led to overall subdued liquidity levels as the general trading activity dropped. Even though such conditions typically tend to cause upsurges in adverse volatility, they could also break a pre-existing market commitment - in this case, the preceding correction.
In other words, the absence of many top-tier economic releases to drive the market this week, happening just a week after the highly-successful earnings season, could be just what tech stocks need to recuperate. The robust quarterly performance may finally be priced in by the market, allowing the Nasdaq to climb higher.
While tensions continue to run high alongside Ukraine's border with Russia as the threat of war still looms high, the market seems to be slowly getting accustomed to the current geopolitical gridlock. The overall risk continues to exert selling pressure on stocks, though this negative impact is somewhat diminishing.
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