The Nasdaq Composite Index, which is based on the prices of high-tech companies, fell on Friday morning, generating a so-called ‘crossing of death’ chart pattern for the first time since April 2020 when the covid-19 pandemic hit. the worldwide economy.
Thus, the index has lost 15% since it reached its all-time high on November 19. According to experts, the ‘crossing of death’ is a chart pattern used by some investors to assess long-term trends and typically anticipates sharp downsides . It occurs when the short-term 50-day moving average crosses below a long-term 200-day moving average.
The Nasdaq Composite Index fell 1.23%, placing the 50-day moving average at 14,710.76, while its 200-day moving average stood at 14,740.44. The last time a ‘death cross’ formed on the Nasdaq Composite was on April 16, 2020, according to Dow Jones Market Data.
With expectations of a new higher interest rate regime being introduced by the Federal Reserve to combat rising inflation , US stocks, and specifically technology, internet and growth stocks, are rate sensitive make up the Nasdaq Composite, have triggered sharp swings.
Also, concerns about the military conflict in Eastern Europe have kept investors on edge, causing sell-offs and driving down stock values in speculative areas of the market.