Is This the End of the Technology Stocks Rally?

Dear Reader,

The main indices in USA fell a lot in the past two days. The Nasdaq Composite and technology stocks, especially, lost a lot of value.

The Nasdaq Composite has been on a tear in the last rolling year making constantly all time highs even after the coronavirus pandemic shutdown's most acute phase.

Is this the end of the recent technology stocks bull market? Yes, I think the Nasdaq Composite will fall more than 20% from its recent all time highs. Why? Simply because technology stocks are overvalued by a wide margin. Overvaluation is the reason for stock markets correcting currently. Just people who have made large gains from the recent market rally are using every wobble in the market to realize their paper profits and this turns into a vicious circle of falling stocks prices.

If there is another trigger, apart from overvaluation, like a large flare up of the coronavirus the Nasdaq Composite and most technology stocks could fall even 50 % from their recent peaks.

I do not like Septembers. Septembers are bad for the stock market historically. Just remember Lehman Brothers and AIG in September in 2008. September is a precursor for the colder months of autumn and winter when there could be a second wave of the coronavirus.

So I think the Nasdaq Composite will fall 20% or more from its recent all time high. If there is another trigger it could lose even more in value. Otherwise, after the Nasdaq Composite falls 20% technology stocks could become undervalued again.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich