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Price development AEX Index
It is Friday, July 12, and the AEX is at 936 in the morning session. That is 2 points lower than last week's reading. Above is the chart of the AEX over the past six months. The most likely scenario for this year as the algorithm now indicates. Just back to the 896 before finishing the trend at 1,025.
The AEX started the week quietly, setting Wednesday morning's low of the week at 929. That afternoon, FED Chairman Powell gave a speech to which the markets reacted very positively. The high for the AEX eventually settled Thursday morning at 945.
Thursday afternoon the most important figures of the week came out; the Consumer Price Index in the US. The inflation figures turned out to be lower than expected. This is what investors want to see because then interest rates can drop further. The opposite happened; stock markets dropped 1.5 to 2.5 percent.
What does this mean for sentiment?
We have been writing for months that the initial price target for the AEX was 935. This price target was reached exactly one month ago today after which a relatively long indecisive period began. The price of the AEX moved volatile within a sideways range. The tentative breakouts at the top were defined by our algorithm as possible false breakouts. The market needs a huge boost to continue rising now because everything indicates that the stretch is out of the price rise for a while. The reaction to yesterday's nice figures confirms this. Nice news for the stock market but no incentive to continue rising. Time for the long-expected correction.
The algorithm issued a sell (short) signal at 938 on Thursday afternoon. Price target 896 with possible runout to 875 and stop loss at closing above 946. This is a correction within a strong uptrend with the unchanged price target at 1,025 for the AEX.
Return: read our view of the AEX of July 5, 2024, here
Stock price movement of the Nasdaq
The Nasdaq futures are currently at 20.428 which is virtually unchanged from last week's reading.
In the past week, the Nasdaq futures posted the highest reading on Thursday morning at 20.983. Following good inflation data, the futures fell to 20,377 (-2.9%).
What is the expectation of the Nasdaq's stock price movement?
The most likely scenario for the Nasdaq is very similar to that of the AEX. However, the Nasdaq is more volatile and the upward trend in the Tech sector is more powerful so the price rise will be further than that in the AEX.
Concretely, the most likely scenario for the next few weeks is a correction that could fall to around 19,000 points. Then the Nasdaq could regain the strong trend towards the adjusted price target of 22,900 points for the future.
Below is the chart of the Nasdaq100 -future over the past six months with the most likely scenario plotted. In general, for equity markets, the trend is strongly upward but for the short term, the stretch is out for a while. This requires some patience and offers long-term opportunities.
Important items on the economic calendar for the week of July 15 to July 19:
In the coming week, the most important event for the stock market is the ECB meeting on Thursday afternoon. The ECB will again decide on European interest rates and will give the explanations starting at 2:45 pm. Furthermore, we may pay attention to the Retail Sales in the US on Tuesday at 2:30 pm. Otherwise, we do not expect any significant figures or events in the coming week.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. Therefore, they are for educational purposes only.
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