Nasdaq Composite Technical Analysis – Key levels in play | Forexlive

Yesterday, we got a bounce in the Nasdaq Composite
as the risk sentiment improved on the geopolitical front due to the lack of an
Israeli ground offensive into Gaza and the release of some hostages. On the
macro front, Treasury yields fell as some big names in the investing world said
that they covered their bearish bond positions due to a deterioration in the
economic environment. The Nasdaq Composite benefited in the short term, but if
the economy is indeed slowing down faster than the data shows, it’s going to be
hard for the bulls to sustain any upside.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite yesterday bounced on the bottom trendline as the
risk sentiment improved. We can also notice that the price is diverging with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. This is where the buyers should start piling in to position for a
rally into the top trendline, while the sellers will want to see the price
breaking lower to invalidate the bullish setup.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
yesterday’s bounce on the bottom trendline, although the Nasdaq Composite eventually
fell into the close. The bias is still skewed to the downside given the
downside breakout of the major upward trendline and the 13174 support, but the
buyers are starting to have some key levels in their favour.

Nasdaq Composite
Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
Nasdaq Composite got rejected from the minor trendline where the sellers had
the confluence with
the 38.2% Fibonacci
retracement level and the red 21 moving average. We
can see that we might form an inverted head and shoulder
pattern around the previous low and that’s where the buyers should step in with
a defined risk below the level to position for a break above the minor
trendline and target the top trendline. The sellers, on the other hand, will
want to see the price breaking lower to invalidate the pattern and increase the
bearish bets into the 12274 support.

Upcoming
Events

Today, we will get the US PMIs and the market might
not like bad figures given the fragile risk sentiment. On Thursday, we will see
the US Jobless Claims data with Continuing Claims recently showing some
softness in the labour market. Finally, on Friday, we will get the US PCE
report, which is not expected to change anything for the Fed at this time.