Evercore is bullish: The historic bull market of the Nasdaq 100 index is expected to continue.

Since the beginning of 2023, the Nasdaq 100 index has nearly doubled, increasing in value by $14 trillion. Despite ongoing concerns in the market about rising bond yields, Rich Ross, technical analysis director at Evercore ISI, remains confident in further increases in the index. Last week, as investors analyzed economic data to seek clues from the Federal Reserve for the next interest rate cut after Trump's victory, US Treasury rates surged to multi-month highs. Trump's victory has sparked concerns in the market about his economic plans, such as high import tariffs and large-scale deportation of low-paid undocumented workers, which are seen as measures that could stimulate inflation and harm economic growth, thus reducing the Fed's room to lower borrowing costs. This not only weakened the attractiveness of rate-sensitive industries, especially the tech industry with high valuations, but also sparked widespread discussions in the market. However, the US 10-year Treasury yield has fallen after touching relatively strong levels, bringing a ray of hope for the market. Rich Ross points out that, combined with positive technical signals, both the Nasdaq 100 index and the S&P 500 index seem poised to hit historic highs in the first quarter. He firmly believes, "Ultimately, technology remains in the lead and will continue to lead the market higher." According to data compiled by Bloomberg, as of Tuesday, the technology-heavy benchmark index has broken its 200-day moving average for 467 consecutive trading days, marking the second-longest continuous breakthrough since the index was established forty years ago. Currently, the trading price of the index is about 10% above its long-term support level, which technical analysts consider a relatively stable signal. Earlier, the index had exceeded this line by 20% in July, which had signaled a sell-off before the summer plunge. The coming weeks will be crucial for the stock market. On one hand, large tech companies are preparing to announce quarterly earnings; on the other hand, the Federal Reserve will make its next policy decision on January 29. As earnings season progresses, investors are closely watching corporate executives' expectations for the coming months. Next week will be the busiest week of the quarter, with companies like Apple Inc., Microsoft Corporation, and Meta Platforms Inc. all set to release earnings. To assess the next move of the Nasdaq 100 index, John Kolovos, head of technical strategy at Macro Risk Advisors, is monitoring the largest Nasdaq 100 Index exchange-traded fund (QQQ.US). He believes that the ETF's technical support level is between $485 and $495, close to its low point in November. In his view, any pullback above these thresholds may provide buying opportunities. Kolovos points out, "Falling yields favor broadening market breadth and increasing stock market participation." Technical analysts are also watching whether Apple Inc. will receive buying support when it approaches its 200-day moving average. Meanwhile, after briefly surpassing 4.8% (higher than the 2024 high) last week, the 10-year US Treasury yield has dropped by over 20 basis points and was hovering around 4.57% on Tuesday. For Kolovos, the next key support level for the benchmark bond yield is 4.5%, close to its 50-day moving average and the high point in November. He is also monitoring 4.8% and the high point of 5% by the end of 2023 as resistance levels. The 14-day relative strength index of the 10-year yield crossed the 70 level two weeks ago, with some technical analysts viewing this as a sign of overheating. It is worth noting that the Nasdaq 100 index is currently about 2.4% below its record high in December. Meanwhile, semiconductor stocks, a sector highly favored by Ross of Evercore ISI, have hit new highs relative to software stocks. This indicates that traders are re-entering stocks of chip manufacturers like NVIDIA Corporation, which have been a major driver of the bull market for over two years. In fact, data compiled by Bloomberg shows that the VanEck Semiconductor ETF, which holds leading chip stocks such as NVIDIA Corporation, Applied Materials, Inc., and AMD, outperformed the iShares Expanded Tech Software Industry ETF for five out of the past six weeks. Ross points out, "The impact of rising rates on small-cap and cyclical stocks is unique. Therefore, when we relieve the pressure of rising rates, the market's first reaction is to buy back those hardest-hit stocks. And when the dust settles, we will eventually return to the strong long-term trends, abundant cash, and huge moats that large tech companies possess."