Nasdaq Composite Technical Analysis | Forexlive

The Nasdaq Composite managed to hold into the last
week gains and consolidated near a key resistance as the first part of the week
didn’t offer any meaningful catalysts. The things should change today though as
we will see the latest US Jobless Claims data and given the recent weakness in
the labour market data, the market is likely to react strongly to this report.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
reached a key resistance zone
where we can find the confluence with the
trendline, the
broken upward trendline and the previous swing high. The price is also
overstretched to the upside as depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. Overall, the bias should be skewed to the
downside.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
key resistance highlighted by the blue box. This is where the sellers should be
stepping in with a defined risk above the trendline to position for a selloff
into new lows with a great risk to reward setup. The buyers, on the other hand,
will want to see the price breaking higher to invalidate the bearish setup and
start targeting a new high.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the price
has been diverging with
the MACD right into
the key resistance. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. This is another layer of confluence for the
bearish setup and we are likely to see a pullback into the 13400 level at very
least where we have the most recent swing low and the broken trendline. A break
below the 13400 level should increase the bearish momentum as the sellers will
gain even more conviction to target new lows.

Upcoming
Events

Today we have the US Jobless Claims on
the agenda, while tomorrow it will be the time for the University of Michigan
Consumer Sentiment report. The market is likely to focus on the US Jobless
Claims given the recent weakness in the labour market data. Weak figures are
likely to weigh on sentiment and push the Nasdaq Composite lower, while good
readings might be enough for the market to rally.