Nasdaq: Momentum Backed by AI, But Caution WarrantedNASDAQ Composite IndexNASDAQ_DLY:IXICJacques1000The Nasdaq Composite closed at 19,714.99 on June 10, extending its rally to three straight days. This rise is underpinned by three key factors: strong AI-led earnings, a supportive macro backdrop, and bullish technical patterns. 1. Fundamentals: AI Fuels Earnings Top tech firms like NVIDIA (Q1 revenue: $44B+) and Broadcom are benefiting from the ongoing AI boom, driving the index higher. Even smaller firms like Duolingo (+53% YTD) are seeing outsized gains thanks to AI integration. 2. Macroeconomics: Stable Policy, Trade Hopes The Fed’s steady rate policy (4.25–4.5%) is helping high-growth tech stocks maintain strong valuations. Meanwhile, improved U.S.–China trade sentiment has lifted investor confidence. 3. Technicals: Bullish Structure Holds The Nasdaq 100 remains in a rising channel, trading above its 20-day moving average. Key levels to watch: Resistance: 21,950–22,200 Support: 21,400 and 20,340 A breakout above 22,200 could open room for further upside. Caution: Market Breadth is Narrow Much of the rally is driven by a few mega-cap names—the “Magnificent Seven”: Apple, Microsoft, Alphabet, Amazon, NVIDIA, Meta, and Tesla. Their outsized influence means the index may rise even while broader market participation is weak. Key Takeaways for Traders AI-related earnings continue to fuel growth. Rate stability supports tech valuations. Market breadth is thin—watch for volatility if leadership stumbles. Use technicals to time entries, but manage risk carefully. Conclusion While the Nasdaq’s rally is fundamentally and technically sound, narrow breadth adds fragility. Stay with the trend, but monitor signs of rotation or pullback closely.