Nasdaq Composite Technical Analysis | Forexlive

Yesterday, the Nasdaq Composite had a negative day
as the US ADP data
missed expectations which might have weighed on the sentiment heading into the
NFP report tomorrow. There might also be a general profit taking ahead of the
NFP data and the FOMC rate decision next week as the market might want some new
strong catalyst to make new highs. In the bigger picture, the market generally
peaks when the labour market weakens, and the unemployment rate starts to rise
steadily, so the bulls should be very careful heading into the 2024.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
bounced recently on the red 21 moving average but failed to trigger another
rally into the cycle high. In fact, yesterday we got a selloff as the miss in
the US ADP data might have weighed on the sentiment heading into the NFP report
tomorrow. A break below the moving average would be
a bad omen for the buyers, although the will still have the support at 13700
as the last line of defence.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price was diverging with the
MACD into the
cycle high. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. We indeed got a pullback recently with the buyers stepping
in around the daily 21 moving average. From a risk management perspective
though, the buyers would have a much better risk to reward setup at the 13700 support
where we can also find the 38.2% Fibonacci retracement level of
the entire rally.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
Nasdaq Composite has been diverging with the MACD since the break above the key
13700 resistance zone. We can also see that the 14050 level acted as a good
support recently so the buyers might try another rally from there as well, but
if the level gets breached, the sellers will pile in aggressively and target a
selloff into the 13700 support.

Upcoming
Events

Today we get the latest US Jobless Claims figures
where the market will want to see how fast the US labour market is weakening.
Tomorrow, we conclude the week with the US NFP report which is going to be a
big market moving event.