Last week, the market remained under pressure as
the more hawkish than expected FOMC dot plot was
still fresh in everyone’s mind. The economic data continues to support the
soft-landing narrative with Jobless Claims showing
a solid labour market and Core PCE trending
downwards. The last day of the week, we got a small bounce across the board as
the market took a breather after the heavy selloff after the FOMC meeting. We
will see if it was just a pullback or the start of a new rally.
Nasdaq Composite Technical
Analysis – Daily Timeframe
Nasdaq Composite Daily
On the daily chart, we can see that the Nasdaq
Composite rallied back above the key support formed
by the trendline and the
38.2% Fibonacci retracement level.
Is this just a pullback and we’ll another selloff or the market is turning
around? The buyers are likely to keep piling in around here with a defined risk
below the support, while the sellers will want to see the price breaking lower
again to jump onboard and ride the fall into the 12274 level.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
Nasdaq Composite 4 hour
On the 4 hour chart, we can see that the bounce
back above the support got rejected at the red 21 moving average and the
38.2% Fibonacci retracement level. This is the resistance that the buyers will
need to break to start targeting the downward trendline around the 13800 level.
The sellers, on the other hand, will keep on leaning on the moving average to
position for further downside.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
Nasdaq Composite 1 hour
On the 1 hour chart, we can see that the
price has been diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the price broke above the trendline, and the moving
averages crossed to the upside, which might be an early signal of a reversal.
The buyers should pile in here with a defined risk below the support to
position for a rally into the downward trendline around the 13800 level. The
sellers, on the other hand, will want to see the price breaking below the
support again to pile in and ride the selloff into the 12274 level.
Upcoming
Events
This week we have many key economic releases that will
culminate in the NFP report on Friday. Today, we will see the latest ISM
Manufacturing PMI. Tomorrow, we will have the Job Openings data which led to a
strong rally the last time as the big miss was interpreted as a good thing due
to less labour market tightness and less hawkish Fed. On Wednesday, it will be
the time for the ADP report and the ISM Services PMI. On Thursday, we will see
the Jobless Claims data, which continues to show a solid labour market. Finally
on Friday, it will be the time for the NFP report which is the only one the Fed
will see before its next rate decision.