Investment World
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Stock Markets
Markets
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Commentary
Nasdaq: Downward in force
B. Krishnakumar
EXCEPT for a nominal gain on Friday, the stock market sentiment at the American bourses remained weak in the remaining four trading days. The flow of disappointing data pertaining to manufacturing sector and reports of a lower car production in November affected market sentiment during the week.
As a result, the benchmark indices registered net decline on a week-on-week basis. The Dow Jones Industrial Average dropped by about 2.8 per cent for the week. The S&P 500 declined by 2.6 per cent while the tech-heavy Nasdaq Composite Index tumbled by 3.8 per cent for the week.
The movement in the Nasdaq Composite Index was right in line with last week's expectations. The index dropped sharply after breaking below the lower boundary of the "Wedge" pattern. The outlook for the index continues to remain weak.
The bearish outlook would remain valid as long as the index trades below 1521 level. In the bigger time frame, only a move above 1700 would negate the bearish outlook. A drop below 1350 would be an early indicator of a further slide towards the 1200-1225 range.
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