It's Friday, March 15th, and the AEX is at 857 in the morning, which is 11 points lower than a week ago.
Last week, the AEX set a provisional top at 872 on good news. This week, tech stocks are pulling back slightly, and we've seen mildly disappointing inflation figures from the US. As a result, the AEX retreats momentarily within the sideways channel between 843 and 865. The major trend for this year remains strongly upward, with a target price of 920.
For the coming week, our algorithm anticipates a slight decline in the AEX based on pattern recognition, possibly even testing the bottom of this channel around 845.
Wednesday evening at 7:00 PM, the interest rate decision and commentary from the FOMC in the US will be crucial for the trajectory of the stock markets in the latter half of the upcoming week. The expectation is for the interest rate in the US to remain unchanged at 5.5%. Much will depend on the FOMC's statement.
We're closely monitoring this with our systems because a delayed interest rate cut in the US could lead to significant corrections in the stock markets in the coming weeks, pushing the AEX back to 830-798. However, for now, the trend is upward, and the market remains robust, with a target price of 920 for this year.
Above is the chart of the AEX since September 2023. The vertical line represents January 1, 2024. You can observe the strong upward movement, particularly in January caused by the tech stocks. Additionally, you'll notice the overall sideways movement in February. After last week's breakout to 872, the AEX retraces this week back into the sideways channel. The target price for 2024 remains 920.
Above, you'll find the chart of the Nasdaq100 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 fueled by the significant growth and expectations of the tech stocks.
Currently, the Nasdaq is at 18,250, approximately 250 points lower than the end of last week. The same principles apply to the Nasdaq as to the AEX. While the price movements in the Nasdaq are more significant and volatile than in the AEX, the trend and scenario are similar. Hence, the algorithm took a long position around the current level on February 22nd. The initial target for the Nasdaq is 19,000, with an ultimate target price for 2024 of 22,500. The system will be closely monitoring the Nasdaq in the coming week for a possible downturn as a larger correction within the major upward trend.
