Annual Forecast for Nasdaq 100 (2021): Expect More Bullish Rallies, but Keep Volatility in Mind

Azeez Mustapha
25 December 2020 | Updated: 25 December 2020

2020 was full of surprises—to say the least—for Wall Street and was a good year for investors, as attention shift to 2021.

The Nasdaq 100 (NDX) is currently trading close to its all-time high amid a raging bull market. Although this might seem normal, you start to see the remarkability in this performance when you consider the battering crash that occurred earlier this year.

Over the space of a month, the NDX plummeted by about 30%, in what has been tagged its worst bear market over the past two decades. At some point in the bear market, the index was seeing double-digit declines in a single day, as all the year’s gains were erased in a matter of days.

Of course, tech stocks, and the stock market in general, rebounded dramatically in the ensuing months. By June, the NDX had recorded a fresh ATH, and it has been new record highs after record high ever since.

As we head into the new year, investors need to keep both the wild bull and bear runs of 2020 in mind. Wall Street analysts have asserted that stock prices will continue to climb higher, however, they also caution that this would happen amid immense volatility—with the prospects of more surprises.

That said, some of the factors likely to spark volatility in the market include:

Developments on Covid-19 Vaccines

Considering that the COVID-19 pandemic will persist into 2021, announcements surrounding vaccines will retain their strong influence on the markets.

Political Stalemate in Washington

Political disagreements and elections between the Republicans and Democrats will be an ever-giving source of volatility for the NDX, beginning with Georgia’s Senate elections coming up on January 5.

Fed Interest Rate

As central banks across the globe slash interest rates and the US Fed keeps it’s near zero, equity markets will continue to rally. That said, 2021 will not see much positive interest rates increasing, meaning that the NAS100 will continue to renew its ATH.

Other factors include economic growth and corporate earnings, sectoral rotations, and US stimulus talks.

NDX – Weekly Chart

Nasdaq 100 (NDX) Value Forecast — 2021

NDX 2021 Bias: Bullish

Supply Levels: 13000, 14000, and 15000.

Demand Levels: 12200, 11000, and 9700.

As mentioned above, the prospects for the current bull market to continue in 2021 are very high, even on the technical aspect. However, the index is currently running in overbought territory and has to facilitate a healthy correction soon. That said, we expect to see a correction in the coming weeks and months to the 12200 area, followed by a strong rebound higher.

Meanwhile, our lowest expectation for the NDX next year is 11000, while our highest expectation is 15000.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Azeez Mustapha

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.