Everyone knows tech stocks are on fire these days but the million dollar question is whether or not they can continue to fly? No one knows for sure of course but it is always wise to look at history to try to get a hint. See the chart below for the Nasdaq 100 index.
It has a similar incident early this year: After barely reaching overbought conditions in early February, and
spending virtually zero time at that level, the Nasdaq 100 fell 7.6%
until reaching a localized bottom in March.
Today’s RSI level is
substantially more overbought than the level in February and has been so
for almost two weeks now. Does that necessarily mean it’ll
suffer a larger drop soon like in Feb? Of course not but history does tend to rhyme, doesn't it?
Be cautious, FOMOs!
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