Nasdaq Composite Technical Analysis | Forexlive

Last Friday, the Nasdaq Composite ended the day
negative following the US NFP report.
There was something for everyone. In fact, for the buyers, the payrolls number
beat expectations while the average hourly earnings missed. For the sellers,
the unemployment rate jumped to 3.9% and the household survey showed a third
consecutive month of job losses. In this case, the technicals should help in
determining the next move for the market as we approach some key levels.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite failed to extend the rally after making a new all-time high as the
price got smacked back down following the NFP report. From a risk management
perspective, the buyers will have a much better risk to reward setup around the
15876 level where we can find the confluence of the trendline and the
red 21 moving average. The
sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and increase the bearish bets into new lows.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price has been diverging with
the MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. We can also notice that the price action formed what
looks like a rising wedge, so if
the price were to break below the trendline, the sellers will have much more
conviction to look for new lows with the base of the wedge at 14477 being the
ultimate target.

Nasdaq Composite
Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
latest leg higher diverged with the MACD and we got a break below the minor
upward trendline. This should confirm a pullback into the major trendline where
we can also find the 61.8% Fibonacci
retracement level for confluence. What happens there
will be key as a break below the trendline could lead to a major correction.

Upcoming
Events

Tomorrow we have the main event of the week, that is
the US CPI report. On Thursday we get the US PPI, the US Retail Sales and the
US Jobless Claims figures. On Friday, we conclude the week with the University
of Michigan Consumer Sentiment survey.