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Publication date: Oct. 17, 2024
Price movement AEX Index
It is Thursday, Oct. 17, and the AEX stands at 893 in the morning session. That is 19 points (2.1%) lower than last week's reading. Here is the chart of the AEX over the past six months. You can see the most likely scenario as we have been reporting for several weeks.
The AEX opened the week slightly positive with a high of 924. Tuesday afternoon earlier than expected heavyweight ASML came out with bad news and pushed the Index to the 892 level. The Tech sector weighs 25% in the AEX so panic in that sector has a big impact on the AEX. Today we await the ECB with its interest rate decision. The expectation is a 0.25% drop in interest rates.
What does this mean for sentiment?
Sentiment in equity markets can again be characterized as "anxious."
As has been reported many times before; expectations are extremely high. A very slight setback will immediately start to provide additional food for the anxious sentiment. It is a matter of waiting to see how the macroeconomic figures turn out in the coming period. It is also especially waiting to see if the heavyweight Tech companies can live up to the high expectations.
What is the expectation for the price movement of the AEX Index?
The algorithm has a running short signal for the AEX from 885. The price target has been changed from 820 to 835. The stoploss remains 930.
The most likely scenario is that the AEX has completed the recovery in the 920-925 zone. Then the larger correction will be completed by a fall of the AEX to the 835 level.
This fall may be triggered as soon as a slightly disappointing macroeconomic figure comes out or if a heavyweight stock fails to meet expectations. Then we can expect another moment of panic selling.
As soon as the correction is completed and the false air is out of the market, we can resume the big trend up. That moment gives fantastic opportunities to buy for the price target of 1025 by the end of 2025.
Look back: read our view of the AEX of October 10, 2024, here
The price movement of the Nasdaq
The Nasdaq futures are currently at 20.430 which is 15 points (0.05%) higher than last week's reading.
The Nasdaq futures also started the week higher with a top of 20.675. After the ASML report, the Nasdaq lost about 2% and landed at 20,275.
What is the expectation for the Nasdaq future?
The Nasdaq appears to have resilience once again and has a nice trend up. The algorithm does narrow the trading range due to the counter risk of a larger intermediate decline. The buy position in the Nasdaq therefore has a modified stoploss and target. The stoploss changes from 19,300 to 19,600 and the price target goes from 21,900 to 21,000.
For the long term, the technical trend is up and the price target has been raised to 22,900.
Below is the Nasdaq futures chart over the past six months with the most likely scenario plotted.
Important items on the economic calendar for the week of Oct. 21 through Oct. 25:
In the coming week, we do not expect any very important macroeconomic figures that will start to determine the direction of the market in the coming weeks.
For those who are interested, Heineken will be releasing figures on Wednesday. Please refer to our article on Heineken at https://yelza.com/research/heineken-sell-in-may. The numbers will indicate whether Heineken is indeed becoming buyable again now that the stock has been at its stated price target for a while.
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. They are therefore for educational purposes only.
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