It's Friday, March 22nd, and the AEX stands at 874 in the morning, 17 points higher than a week ago.
For the past few weeks, the AEX has been hovering around its initial target of 875. In week 10, the index surged to 872 on positive news from the Tech sector, only to fall back to 851. Then, in the past week, came the news many investors had been waiting for: the FED will cut interest rates to around 4.6% this year. Currently, the primary interest rate is 5.5%. With that, we've already had all the good news that was looming. The AEX subsequently set its provisional highest point this week at 876.
In addition to fundamental factors, our algorithm suggests that we can expect a new top slightly higher than the current one. The initial target from the current level is 890, with a high probability that the AEX will first correct to 866.
Once we reach 890, the exit scenario will come into play, and the algorithm will seek an optimal point to close the ongoing long position. The possibility of a larger correction increases around 890. This correction could be significant and will ultimately pave the way for the ultimate target of 920.
For now, the technical expectation for the AEX is a slight correction, maximum up to 866. Then, a rise towards the target of 890, followed by sharp timing for the exit.
Above, you'll find the Nasdaq100 chart since the summer of 2023, clearly showing the strong upward trend from October towards the initial target of 19,000. The current upward trend is driven by the significant growth and expectations of the tech stocks.
Currently, the Nasdaq is at 18,250, about 250 points lower than the end of last week. The same applies to the Nasdaq as for the AEX. While price fluctuations in the Nasdaq are larger and more volatile than in the AEX, the trend and scenario are similar. Hence, the algorithm also took a long position here around February 22 at the current level. The first target for the Nasdaq is 19,000 with an ultimate target price for 2024 of 22,500. For the Nasdaq, the system will be closely watching for a possible decline as a larger correction within the major upward trend in the coming week.
