Nasdaq correction looks to be over
For this post, I will use NDX & Nasdaq interchangeably. For those of you not as familiar with the index, you may be more familiar with the ETF QQQ, which tracks the Nasdaq or NDX.
The NDX correction looks to be over. A bottom was created partially when Cathie Wood's set a floor by coming into the market guns blazing loading up on some of the riskiest, highest-flying names in the Nasdaq.
A churn from growth to value has been underway and should continue as rates rise. Nasdaq has far outperformed the other 2 major indices so I expect it to trade somewhat sideways for a period of time.
Moving averages maintained in the 2H chart, no bearish crosses, and the NDX has already started to bounce back.
Look for quality in times like these and other ways to generate returns. Some factors to look for are:
1. a P/E ratio below 17x; meaning it is not too overvalued.
2. a solid balance sheet with positive cash flow
3. a dividend yield (if #2 is achieved, dividend yield should be safe with potential raises and share buybacks)
4. a quick ratio at least above 1.0. (this defines financial health & ability to deal with debts) the higher the better.
5. solid trends in earnings beats
The NDX correction looks to be over. A bottom was created partially when Cathie Wood's set a floor by coming into the market guns blazing loading up on some of the riskiest, highest-flying names in the Nasdaq.
A churn from growth to value has been underway and should continue as rates rise. Nasdaq has far outperformed the other 2 major indices so I expect it to trade somewhat sideways for a period of time.
Moving averages maintained in the 2H chart, no bearish crosses, and the NDX has already started to bounce back.
Look for quality in times like these and other ways to generate returns. Some factors to look for are:
1. a P/E ratio below 17x; meaning it is not too overvalued.
2. a solid balance sheet with positive cash flow
3. a dividend yield (if #2 is achieved, dividend yield should be safe with potential raises and share buybacks)
4. a quick ratio at least above 1.0. (this defines financial health & ability to deal with debts) the higher the better.
5. solid trends in earnings beats
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