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Nasdaq OMX Catapults Higher

On a pullback, I'm seeing a very low-risk buy at this key level.
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Nasdaq OMX (NDAQ) shares are pushing further into fresh 52-week-high ground. The stock was recently up just shy of 1.5% Thursday as it extended on Wednesday's earnings-driven 5.75% breakout, a powerful rally sparked by the company's 27% third-quarter profit increase. The move has lifted shares past heavy resistance just below $34.50 -- and, with this area now cleared, the stock is set up well for more upside.

After hitting the $34.50 area in July, Nasdaq OMX suffered a deep pullback. By late August, the stock had fallen 15% and had retraced over two-thirds of the big rally off the April lows. Shares managed to settle in near major support at the 200-day moving average as August came to an end.

In early September, with the stock reaching oversold levels -- and with key support in play -- Nasdaq shares made a sharp turn. The month started with seven straight trading days of gains, and the string grew to 12 of the first 13 sessions of September. Late in the month, and into early October, the stock took a rest. But, since the Oct. 9 low, the potent rally off the August-and-September double-bottom has been back on track.

With the post-earnings surge, Nasdaq OMX stock is now up more than 20% from last month's low. The stock is now a bit extended, and it may need a pullback soon -- and I believe a retest of the July high will provide a very low-risk buying opportunity for patient bulls. This support zone includes multi-week highs near $34.40. I am not in the stock at this time, but I will be a buyer following a healthy pullback. On the upside, I expect Nasdaq to make a run at its late-2008 peak just below $39. This was a major spike high back in September that preceded a more-than-60% collapse by late November of that year.

At the time of publication, Morrow had no positions in the stocks mentioned.