Recently, investors have seen the Nasdaq 100 Index moving in an upward trend. The index has gained 8.8 percent over the course of the last week, and the surge appears to be mostly driven by technology stocks. However, analysts now suggest that the current bullish rally may be nearing its end.
Investors should be aware that there could now be a pullback in the Nasdaq 100, which would bring the index back to more reasonable levels. According to estimates, the index could drop by 2.5 percent if such a pullback were to occur. That means that investors should be aware that the gains seen over the last week or so may unwind slightly over the upcoming few days.
This estimated drop in the Nasdaq 100 is being attributed to a mix of profit taking, valuation concerns, and a rise in the value of the dollar. Analysts believe that the higher value of the dollar could be the most likely driver behind the estimated drop in the index. Specifically, the U.S. Dollar Index (DXY) has jumped by 0.8 percent in the past two days alone, which is likely to affect the Nasdaq 100 in a negative manner.
Ultimately, investors should be aware that the bullish trend seen in the Nasdaq 100 over the last week may not continue. If a pullback does indeed occur, it could represent a nice buying opportunity for those investors with a long-term outlook. In the meantime, investors should keep an eye on the DXY to gauge its effect on the Nasdaq 100 in the coming days.