Analysis of the price of the Nasdaq 100 index

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76.4% of retail investor accounts lose money when trading CFDs with this provider.
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However, one of the most traded indices in the world is the Nasdaq, which has certain specificities such as high volatility.  

Presentation of Nasdaq and its characteristics:

Although published and quoted in the United States, Nasdaq is not a national stock exchange index. Its initials represent ‘National Association of Securities Dealers Automated Quotations’ and it represents the new technologies sector on an international level.

The Nasdaq was created by the NASD, the National Association of Securities Dealers (currently known as the FINRA), in 1971 to respond to the major advances in the electronics sector that demanded a dedicated market separate from the global economical markets. Nowadays Nasdaq is the major digital electronic stock market in the world.

It is actually on Wall Street that Nasdaq is quoted. This index is in fact the second most important on this major stock exchange with impressively high trading volumes.

The volatility seen on the Nasdaq is among the highest in the market, making it an asset often used for day-trading or short-term trading.


The 10 companies with the highest weight in the NASDAQ index:

If you can speculate on the price of the Nasdaq index itself with CFDs, you can also choose to trade one of the stocks listed on this stock market index. Of course, we will not reveal here the 100 values that make up this index but the 10 values that have the most important weight in its calculation. So here are the ten most important actions of the NASDAQ at the moment:


The NASDAQ market in detail:

In this article you have found useful information about the Nasdaq stock market index, but what about the market of the same name?

The NASDAQ market is a financial centre and stock exchange that began in 1971. Today, this market is the second largest equity market in the United States in terms of trading volumes and is thus second only to the New York Stock Exchange. NASDAQ is also the largest electronic equity market in the world. It has been held by the group of the same name since 2008. Of course, the NASDAQ index is the benchmark stock market index for this market and therefore tends to measure the performance of companies whose shares are listed on it.

Today, the total market capitalization of this market is more than $1 trillion and it lists the shares of more than 3,200 different companies, the vast majority of which suffered significant losses during the collapse of the speculative bubbles. Exchanges are processed continuously and on different servers grouped in a single room. The systems housed there are thus able to process more than 900 transactions per second.

It is also important to note here that companies listed on the NASDAQ market very often come from the IT and Internet sector. However, there are also stocks from other sectors such as banking, distribution, biotechnology, industry and transportation. This index is therefore much more representative today than in the past.
Finally, it should be noted that the NASDAQ market also plays the role of a natural outlet for venture capital funds, which is a financing method whose principle is to accept the risk of losing money in nearly three quarters of cases by compensating with the remaining quarter, which is most often a company capable of rapidly increasing its size.


How is the Nasdaq calculated?

The Nasdaq Index is calculated from all the companies registered on the Nasdaq Stock Market which is different to the other major indices that take into account only a certain sector on the registered companies. The Nasdaq is therefore a very precise global index. 

Of course, the importance attributed to each of these companies in the final calculation of the Index differs according to the stock capital of each of them. It is important to note that the share prices of companies in the technological sector are far more volatile than those of companies quoted on the general Stock Market.


The history and evolution of the Nasdaq

The history of the Nasdaq follows the technological evolution of these last years with the arrival and following development of the Internet and its numerous types of media that enabled this index in the beginning to beat all records relative to an increase. 

However the bursting of the Internet bubble in 2003 caused a decisive drop in this value and the Nasdaq lost points when the announcement was made concerning the separation of Microsoft into several distinct entities. 

Nowadays, the Nasdaq continues to rise on a global trend with the entry onto the market of new companies that are also specialised in new technologies. It is fairly easy to foresee future movements by following this market closely.


Some advice for trading on the Nasdaq:

There are various methods of trading on the Nasdaq, one of the most popular is trading using CFDs offered by numerous brokers that enables the opportunity to make profits on the rise, and on the fall, of the price. In that case you simply have to anticipate the rising or falling movements of this market. Of course, an analysis of the 100 companies quoted on this index would be far too time consuming, particularly if you are an individual trader. It is therefore far more practical and judicious to complete your analysis based on the global results of the new technologies and electronics activities sector.

Of course, it is still extremely useful to follow the news and results of the large global companies in this sector that exert a strong influence on the prices, like that of the movements of the American economy that equally influences the movements of the Nasdaq.

Finally, the historical movements of prices enable a more advanced approach of the fundamental analysis. By studying the past reactions of this index to precise events you will better be able to understand how it may react to future events.

Let us end this article with some advice regarding technical analysis. The movements of this index are often highly volatile and therefore also voluminous. It can therefore be profitable to trade on the support and resistance levels when you identify a strong trend but do not forget to combine the results obtained with those from a fundamental analysis.

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