Here’s another reason why ‘this time is different‘ for the Nasdaq.
As the tech-dominated index approached the 5,000 mark last month, some analysts argued that this is a repeat of 2000, when stocks were overvalued and the Nasdaq tumbled.
JC O’Hara at FBN Securities, however, notes that traders are not as confident that stock valuations will continue to climb higher as they were at the Nasdaq’s previous record high.
O’Hara published the chart below in a note Tuesday, which tracks the Nasdaq as well as investor sentiment.
The American Association of Individual Investors surveys the direction that investors are betting stocks will go.
O’Hara wrote: “The Nasdaq Composite stole many headlines last week as it eclipsed its prior peak some 15 years earlier.
We believe the orderly process and the lack of extreme optimism will allow price to continue in its advance, as technically trend and internals are more constructive now versus the 2000 top.“