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The Nasdaq Composite index, the flagship index of technology stocks on the American stock market, which concentrates files with very high PERs in which AI is often at the heart of the value creation chain, is expected to fall very sharply this Monday, in due to strong news about a Chinese player in the sector, DeepSeek.
This startup, owned by a wealth management company, managed to “train” its AI model for $6 million, a paltry sum compared to that incurred by the American OpenAI, of the order of $3 billion. $. And this for astonishing results in terms of the effectiveness of the tool.
Enough to ask 3 essential questions, which trading rooms cannot ignore:
1) Is this a real return of China in the AI race? In any case, commercially, China will be able to legitimately sell its services to customers in developing countries, initially focused on American references in this area.
2) The second question is that of the limit of American sanctions for exports of chips with very high computing power. Remember that for 3 years, the United States has no longer exported the most efficient semiconductors to China, the “NVidia A100”. DeepSeek claims to have trained its AI model on chips that are much less efficient in terms of computing power.
3) Which allows us to move on to the third question: computing power, as essential as it is, is not everything. Chinese companies, deprived of the best chips, have been forced to innovate in software, visibly successfully.
“This information did not come out this weekend, we have already been talking about DeepSeek for several weeks but the pressure has suddenly increased on the markets because the budgets allocated by the “big techs” to the development of intelligence models are not slowing down, like “Stargate” and its $500 billion, as well as Meta’s announcements at the end of last week”, notes Alexandre Baradez (IG France). “The question of the capacity of large technological groups to make gigantic investments profitable suddenly seems to arise in the markets, in a highly competitive environment as shown by the performance of Chinese artificial intelligence,” asks the analyst.
We will follow the sales of new American homes at 4:00 p.m., before the sacrosanct consumer confidence index (Conference Board) tomorrow, and the outcome of the Fed’s FOMC on Wednesday.
KEY GRAPHIC ELEMENTS
The 20,000 symbolic points will gradually constitute a level of resistance, if they are not quickly regained. In the immediate future, a little more careful navigation is required, especially since the gap on November 6 may gradually have an attraction effect. Its lower limit is worth 18,449 points. It will then be time to anticipate the formation, and identify the shape, of the consolidation figure (rectangle, diamond, bevel, correction leg)…
For the moment, a broader type of consolidation holds the rope. Strongly negative opinion, within this figure, which increasingly takes on the appearance of a diamond.
FORECAST
Based on the key chart factors we have mentioned, our view is negative on the Nasdaq Composite Index in the short term.
This bearish scenario is valid as long as the Nasdaq Composite index is trading below resistance at 20180.00 points.
News Bulletin 247 advice
DAILY DATA CHART
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