The Nasdaq 100 experienced a significant drop on Friday, with many of the big cap favorites contributing to the decline. Analysts attributed the sell-off to a variety of factors including the lack of interest rate cuts and tensions in the Middle East. The index had been on a powerful rally but was overdue for a correction.
After reaching a low in late October 2023, the Nasdaq 100 had been performing strongly until March of this year when it began to ease up. The recent selling pushed the index below its 50-day moving average for the first time since November 2023. The daily price chart showed a downward trend with the price closing below the up-trending 50-day moving average for five consecutive days.
One of the key components of the Nasdaq 100, Apple, saw a significant decline with the stock dropping from above $198 in December to $165, marking a 16.67% decrease over a five-month period. The 50-day moving average crossed below the 200-day moving average in mid-March and the price dropped below the late October low. Meta also experienced a decline, falling below its 50-day moving average for the first time in months. The 200-day moving average is now at $368.
NVIDIA, another index favorite, showed a close below an up-trending 50-day moving average on good volume. The stock may target the mid-February gap up zone from $650 to $750 if selling continues. Tesla, on the other hand, saw a significant drop with the stock falling below mid-March support levels. The price chart reflected a 47% drop from the peak in September to the current price of $147. Both the 50-day and 200-day moving averages are in downtrends.
Overall, the Nasdaq 100 and several of its key components experienced a significant sell-off on Friday, with the index dropping below its 50-day moving average and showing downward trends on the daily price charts. Analysts suggest that a correction was overdue given the recent powerful rally, and external factors such as the lack of interest rate cuts and tensions in the Middle East may have contributed to the decline. Investors will be watching closely to see where the index and its components go from here.
