The Hindu Business Line : Nasdaq: Bleak outlook

AFTER a firm start, the American stock market sentiment weakened as the week progressed. The half a percentage point cut in interest rate effected by the Federal Reserve imparted positive sentiment at the American bourses.

However, the earnings warning from Cisco Systems triggered a slide in share price of technology stocks. As a result, the tech-laced Nasdaq Composite Index and the S&P 500 logged weekly decline after having registered four successive weeks of gains. The Dow Jones Industrial Average however managed to eke out a marginal gain.

Technically, the Nasdaq Composite Index moved in line with earlier expectations. After inching past the earlier mentioned target of 1400, the index turned weak in the last two days of the week.

Going by the recent movement, the Nasdaq Composite Index appears to have completed the rally that commenced in October. The index is expected to rule weak in the near term.

As mentioned last week, only a move above 1450 would warrant a re-assessment of the long-term bearish market outlook. The earlier view that the index would slide to sub-1000 level continues to remain valid.

(Note: The analysis and opinions expressed in these columns are based on the technical analysis of the past price behaviour. Analysis and price targets are based on the Elliott Wave Analysis. There is a risk of loss in trading)

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