On the daily chart below for the Nasdaq,
we can see that we have finally got a breakout. This 12274 level has been a
really tough nut to crack, but the buyers eventually succeeded. We can see how
they’ve been knocking on that door for over a month and as soon as the price
started to run to the upside, sellers folded quickly.
The risk sentiment was also
helped by the recent positive
news on the debt ceiling front which points to a classic “buy the rumour”
type of trade. Right now, the buyers don’t have much resistance on the upside except the clear
swing high at 13174. We may even see the rally extending towards that high with
little to no pullbacks as the FOMO kicks in.
On the 4 hour chart below, we can
see more closely the breakout of the range just beneath the 12274 resistance.
The big bullish
flag pattern is still working and as previously mentioned, the target should
be right around the 13000 high. The sellers may have a hard time now timing a
top as there aren’t strong levels to lean on as before. Nonetheless, watch out
for Fed Chair Powell today as he may lean more explicitly
towards a June rate hike justified by the recent better than expected economic
data.
On the 1 hour chart below, we can
see that we have just a minor resistance from the August 2022 swing high. This
level may see some profit taking and lead to a pullback. The buyers should be
waiting for another rally at the nearest trendline though, while the sellers will
want to see the price to break below it to get some more confidence on further
downside. What looks clear is that the bias should remain bullish as long as
the price stays above the 12274 resistance.