Yesterday, the Nasdaq Composite continued to rally
as the geopolitical risk decreased given the lack of a ground offence in Gaza
and the release of some hostages at the start of the week. Moreover, the US PMIs showed a
balanced economy as both the manufacturing and the services sectors are now
just a touch above the 50 level which indicates expansion. This is just another
data point supporting the soft-landing scenario as even the labour market
continues to soften via lower job openings rather than more layoffs.
Nasdaq Composite Technical
Analysis – Daily Timeframe
Nasdaq Composite Daily
On the daily chart, we can see that the Nasdaq
Composite yesterday continued the rally that began from the bottom trendline and it’s
now testing the key 13174 level. We can also notice that the recent leg lower diverged with the
MACD which is
generally a sign of weakening momentum often followed by pullback or reversals.
In this case, a break to the upside should trigger more bullish bets as the
buyers will start to target the top trendline around the 13700 level.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
Nasdaq Composite 4 hour
On the 4 hour chart, we can see more closely the
key 13174 level where we have also the 38.2% Fibonacci retracement level
for confluence. This is
where we can expect the sellers to step in with a defined risk above the level
to target another drop into the bottom trendline aiming for a breakout.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
Nasdaq Composite 1 hour
On the 1 hour chart, we can see that the inverted head and
shoulders highlighted yesterday seems to be working out with
the break above the minor trendline and the crossover of the moving averages
sustaining the bullish setup. The buyers will just need to take out the 13174 resistance to
gain more conviction and target the 13700 level.
Upcoming
Events
Tomorrow, we will see the US Jobless Claims data with the
market likely focusing on the Continuing Claims figures as they’ve been
recently showing some softness. On Friday, we will get the US PCE report, which
is not expected to change anything for the Fed at this point in time.