The NASDAQ Composite index is on the verge of 4,000. But, is it ripe for a correction?
People nostalgic for the late-1990s are certainly thrilled these days, particularly investors. That's because 1999 feels like it's coming back in full force.
There's the absurd (tech companies with no revenues valued at billions), there's the embarrassing (the Backstreet Boys are on tour again), and then there's the NASDAQ.
On Friday, the NASDAQ Composite index closed nearly 14 points below 4000. The last time the index touched these levels on an upswing was at the dawn of Y2K. And, we all know how that turned out.
"NASDAQ is full of bubbles," says CNBC contributor Gina Sanchez, founder of Chantico Global. "There are definitely stocks that highly overvalued within the NASDAQ. However, that isn't the case for every single stock in the NASDAQ. Not everyone is a Tesla, a Netflix, a Facebook, or LinkedIn. We've definitely seen some incredible moves as the general view of the world has shifted from value to growth."
While Sanchez is generally bullish on the NASDAQ, CNBC contributor Andrew Busch, editor and publisher of The Busch Update, is more cautious. Busch's concerns come from where the technical indicators are.
"The 200-day moving average is way down at 3506," notes Busch. "Heck, we're still above the 10-day moving average, which is at 3928."
In the video above, Busch gives one plan for how investors can use those indicators if they're uneasy with the NASDAQ Composite's current valuations. To see Busch's bearish strategy, as well as the reasons why Sanchez is bullish, watch the video above.
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