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Direct Ascent
Since the January 2023 retest of the 2022 lows, the Nasdaq has mooned.
The rate of ascent has surprised many. In truth though, the index is following standard technical patterns on the way up. In the larger degree, the above chart is tracking to the 5th-wave up we’ve been talking about since before that Wave 3 high in November 2021. If our analysis is correct - and so far it’s been pretty good save that we though the 2022 selloff would arrest at maybe $286 (the 50% retrace of the prior Wave 3 up) rather than that repeated spike down to the 61.8% retrace with the low at around $256 - then we think the QQQ can run to at least the mid-400s before it starts to slow. There is also a possibility, and we put it no stronger than that, that the Nasdaq may in fact be early in a new bull market - and if so we may see the QQQ run to 600 and more before a real selloff. We discuss that more bullish outlook right here: What If The Nasdaq Is Just Getting Started?
Right now we ought to be seeing some volatility in the index. We have the Fed rate decision tomorrow and we had both Google and Microsoft reporting earnings today. That said, the Nasdaq sailed right through monthly options expiry and subsequent dealer hedge unwinding without missing a beat.
For our Premium and Pro members only, let’s take a look at what Microsoft reported today. We’ll also take a look at Tenable TENB 0.00%↑, a cybersecurity name that reported today after the close, delivering a +10% gain in the post-market trading session.
Microsoft MSFT 0.00%↑
Overall the company is in very good shape. Revenue growth accelerated, EBITDA and cashflow margins moved up a little, and the balance sheet remains stronger than that of many mid-sized sovereign nations. The stock held up well until the management team issued guidance, whereupon there was a little selling. At the time of writing the stock is down a little over 2% on Monday’s close. Below we go through the fundamentals, valuation, and stock chart with our price outlook.
Tenable TENB 0.00%↑
The company delivered solid revenue growth and deferred revenue growth. Cashflow margins were down but we don’t think that’s a concern at present.
For each of those names, below the paywall you’ll find the fundamentals, valuation, our stock charts and price outlooks.
We’ll go through the market’s reaction to these names, and indeed the immediate reaction to FOMC, in our live webinar on Wednesday at 5pm Eastern (for our Pro members only).