Nasdaq Composite Technical Analysis | Forexlive
On the daily chart below, we can
see that once the Nasdaq managed to break above the key 12274 resistance, it was almost a non-stop rally
into the bullish
flag pattern target at the 13000ish level. The next big resistance is at the
13174 level and it’s going to be hard for the sellers to fight the momentum if
the Nasdaq breaks above that high.
Last Friday’s rally was caused by
positive news on the debt ceiling deal that made the market to expect a possible
deal over the weekend. Sure enough, the deal
was announced yesterday. What we might see now is the classic
“sell the fact” scenario where the market reverses once the expected outcome is
confirmed.
On the 4 hour chart below, we can
see that 13000 target was hit last Friday. What happens next will depend on the
data. It’s likely that we will keep on seeing dips being bought as long as the
labour market remains strong. In the near term, we may see the above-mentioned
“sell the fact” trade where the Nasdaq pulls back towards the 12660 resistance
turned support and then either bounces or sells off more.
On the 1 hour chart below, we can
see that the buyers may be waiting at the 38.2% Fibonacci
retracement level near the 12760 high with a limited risk
below the 12660 support. This 12660-12760 will be the buying zone and the
target will be the 13174 resistance.
The sellers will want to see the
Nasdaq breaking below that buying zone to target the 12400ish level where we
find the upward trendline. In case the price falls below
the trendline, the sellers will pile in more aggressively as it would open the
door for a big selloff towards the 11800 swing low level.