The NASDAQ index moved to a new high last week. The move pushed the index up 3.6% for the week. The question mark is will it hold the move and regain the previous uptrend? The volume has been above average on the move and the leadership has been broad based. The small cap stocks have been the highlight more so than the large cap. In fact the NASDAQ 100 index has not reached a new high. That is something to watch short term.

Technology stocks were up 3.1% and semiconductors were higher by 3.1% as well. Software gained 3.9% and networking was up 4.5% to lead the sub-sectors. Apple up 7% and Google up 7.1% both posted solid weeks to lead the NASDAQ higher.

How much more gas is in the tank so to speak? For me the key is the large cap stocks stepping up and joining the party. I am looking for the NASDAQ 100 index to break to a new high and assist to the upside short term. However, the solid move from last week will need some room to digest and consolidate the move higher. If the pullback is orderly and on lower volume it could be an opportunity to add to positions in the index.

Using QQQQ as a benchmark ETF I would define the test/pullback at $45.74 this week. If we have a low volume test down use an entry off the test say $46. The initial stop would be $44.70 and I would set the initial target at $50.35. This is a short term outlook obviously and the longer term view for the index could be much higher depending on the economic growth.

As with any investment be sure to define your strategy, your risk and your objective. Don’t risk money without each defining them prior to investing.