Big tech trying to push the Nasdaq 100 above its 200-day average
After plunging below its long-term moving average in March, the big tech stocks driving the Nasdaq 100 have allowed that index to pop back above (at least for now, about 1/2 hour before the close).
While not the most oversold reading in history, that nearly 15% deviation was among the larger ones, especially over the past decade.
This is a relatively quick recovery for that index. The only time it recovered faster, from this much of a deviation, was in November 2002. That's not a great precedent, since the index turned lower immediately afterward.
It's also a sample size of one, so we can relax the parameters and look for times the NDX was at least 10% below its 200-day average at some point in the past 50 days then recovered.
Returns going forward were mixed, with mostly positive over the next 1-2 months, negative after 3 months, then positive again after 6-12 months.
Looking at the individual cases, about the most general conclusion we can muster is that if the NDX was going to peak, it typically did so right away. As soon as the index recovered above its 200-day, the worst failures tended to see almost immediate selling pressure.
It's not a perfect correlation, but it seems like after a recovery like this, if buyers can continue to build on the momentum it should bode well longer-term as well.