The fears around a larger conflict in the Middle
East eased on Monday as Israel didn’t proceed with a ground offensive in Gaza
over the weekend and there are ongoing talks for a more diplomatic resolution.
The risk is still there, but the market is looking through it as long as the
conflict remains confined to Israel and Hamas. On a more domestic front, the
Fed officials continue to repeat that they are probably done with rate hikes
and can wait more to see how the economy evolves.
Nasdaq Composite Technical
Analysis – Daily Timeframe
Nasdaq Composite Daily
On the daily chart, we can see that the Nasdaq
Composite fell back to the upward trendline and the
red 21 moving average where it
bounced as the buyers stepped in to position for a rally into the downward
trendline around the 13800 level. A break above the downward trendline would
open the door for a much bigger rally into new highs.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
Nasdaq Composite 4 hour
On the 4 hour chart, we can see more clearly the
strong support we had around the 13365 level where we had also the confluence with the
50% Fibonacci retracement level
and the red 21 moving average. The sellers will need the price to fall below
this support level to invalidate the bullish setup and position for a drop into
new lows.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
Nasdaq Composite 1 hour
On the 1 hour chart, we can see that the
break above the counter-trendline brought even more buyers into the market as
it acted as a confirmation for a successful bounce and a possible extension to
the 13800 level. We now have two key levels to watch:
- The
resistance around the 13617 level, where a break to the upside should increase
the bullish momentum and take the Nasdaq Composite into the 13800 level. - The
support around the 13500 level, where the buyers are likely to step in in case
we get a pullback. A break below this level would see more sellers entering the
market and targeting the break below the 13365 support.
Upcoming
Events
Today we will get the US Retail Sales data and it
will be interesting to see if consumer spending has weakened or it’s still
holding on. On Thursday, we will get the US Jobless Claims report and we will
also hear from Fed Chair Powell with the market focused on any hint about the
near term policy outlook.