Nasdaq Composite Technical Analysis | Forexlive

The Nasdaq Composite ended last week on a positive
note as we got a strong rally despite some concerning data. The University of Michigan consumer
sentiment report missed forecasts across the board by a big margin once again.
The bearish signs keep on accumulating with the recent hawkish tone from Fed
speakers and the softening labour market data with the big misses in the recent
NFP report
and the rising Continuing Claims. The
buyers should be very careful going forward.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the
daily chart, we can see that the Nasdaq Composite last Friday broke above the
key trendline and the resistance around
the 13700 level. The buyers are likely to pile in, but they should be extra
careful given that the rally was not supported by any bullish catalysts, so the
risk of a fakeout is higher.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
breakout above the key trendline. The sellers will want to see the price
falling back below the trendline and the 13700 level to confirm a fakeout and
position for a drop into the lows.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the price
is diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. If we get a pullback, the buyers should lean on the upward trendline
and the red 21 moving average to
position for further upside. If the price breaks below the upward trendline
though, the reversal would be confirmed, and the sellers will regain back
control.

Upcoming
Events

This week we have some top tier economic releases. We
begin tomorrow with the US CPI report which is going to be one of the most
important events of the week. On Wednesday, we have the US Retail Sales and PPI
data, while on Thursday we conclude with the latest US Jobless Claims figures.