BofA strategists: Nasdaq flashing bearish warning for tech stocks

The tech-heavy Nasdaq Composite has edged higher after last week’s plunge, but Bank of America technical strategists warned on Monday that the Nasdaq 100 is flashing bearish signals and that headwinds are mounting. They urged investors to begin managing the risk of a pullback.

"The NDX rally extended slightly beyond expectation, breaking above 30,000. The trend became stretched relative to our measured move targets," the strategists said, noting the 14-week Relative Strength Index reached overbought levels and then turned down, creating a bearish engulfing week.

They flagged 28,567 — about a 3% decline from Tuesday’s levels — as the next key level to watch, since a drop there would mark a new four-week low and signal a retest of 2025 highs. Chip stocks have led the rally, but technicals indicate the group is overbought and likely to see higher volatility.

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