To successfully trade U.S. equities, it is essential to have an idea of the overall direction that the market is moving. While there are outliers, individual stocks tend to move toward the broader market. So, how do you determine the direction that the market is going? One of the best tools that you can use is the NAS 100 live chart.
The NAS100 live chart is a chart for the indexed prices of America’s top 100 largest and most liquid corporations. Essentially, this chart can give you an idea of what American investors think at any given time.
How Can The NAS 100 help traders?
As mentioned above, the NAS 100 gives traders a feel of the overall market at any time. As such, anyone interested in individual stocks can use this tool to decide whether it is an excellent time to go long, go short, or just stay away from the stocks.
If you see buying volumes going up on the NAS 100, it would mean that investors are overall optimistic about equities. This would also mean that individual stocks whose fundamentals are right can also do well.
On the flip side, when the NAS 100 is going down, it is usually an indicator that investors are not optimistic about the market. The result is that even individual stocks that have good fundamentals can end up underperforming the market.
Essentially, the NAS 100, alongside other top indices like the S&P 500, are strong leading indicators for equities traders.
Why Is The NAS 100 Chart An Excellent Leading Indicator?
The reason is simple. Most of the trading in the equity markets in the U.S. and globally is usually done by institutional investors – hedge funds and pension funds, among others.
These institutions trade in billions of dollars, and whatever moves they make affect the market direction. At the same time, these institutions have an obligation to many people and, as such, tend to be risk averse.
As such, while they do invest in individual stocks, they mostly invest through index funds. That’s why indexes like the NAS 100 have a bearing on the stock market’s overall direction.
Essentially, it makes sense for an individual trader to keep an eye on the NAS 100 chart to determine what the big players think.
If you find the NAS 100 is going down, it could mean that the big institutional players believe that the economy and, by extension, the stock markets may not do so well in the short to medium term.
Since these big players have access to some of the best brains, and trading tools, you can choose to trade alongside them. You can do this by going short or opting for stocks that do well in bear markets.
Conversely, when the NAS 100 is going up, it is usually an indicator that the big players expect the market to do well. In such a scenario, investing in high beta stocks would be a better bet. These stocks tend to outperform indexes like the S&P 500 and the NAS 100. By investing in such stocks, you can easily beat the market. Of course, besides the beta, you also need to consider the industry and the fundamentals of an individual stock.
Where To Monitor The NAS 100 chart?
The NAS 100 chart is readily available online. However, to get the chart and more unified analysis of the market, it would be best to access it via a trading platform like NAGA. This platform has in-depth trading tools and a copy trading tool that you can use to make successful trades without learning how to trade.
Recap
The NAS 100 chart shows the overall direction of the top 100 largest and most liquid stocks in the United States. Through this chart, you can determine the general direction of the market, information that you can use to trade individual stocks.
