Nasdaq Composite Technical Analysis | Forexlive

The Nasdaq Composite reached the cycle high
yesterday and retracted soon after despite a less hawkish Fedspeak and
increased rate cuts expectations. One good reason might be the weakening of US
data, especially on the labour market side, as we have also seen recently in
the details of the US Consumer Confidence report.
Historically, the sustained rise in the unemployment rate is bearish for the
stock market.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
fell into the close yesterday after piercing the cycle high at 14446. This is
where the things should get interesting as the sellers will likely step in more
aggressively with a defined risk above the cycle high to position for a drop
into new lows. The buyers, on the other hand, might start to take some profits
off the table at these levels increasing the bearish momentum.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD right as
the Nasdaq Composite was approaching the cycle high. This is generally a sign
of weakening momentum often followed by pullbacks or reversals. In this case,
it might be a signal that we could indeed see at least a deeper pullback. From
a risk management perspective, the buyers would have a much better risk to
reward setup around the 13700 support where we
can also find the confluence with 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
price has been diverging with the MACD since the breakout of the support at
13700. The price recently broke below the lower bound of the rising channel
which increased even more the odds for a pullback, although we got what could
have been one last spike into the cycle high. The sellers should now start to
pile in targeting first the base of the channel around the 14000 level and upon
a further break lower, the support at 13700. The buyers, on the other hand,
should lean on those levels to position for a rally into new highs.

Upcoming
Events

Today we will get the US PCE and US Jobless Claims
data with the market likely focusing more on the Jobless Claims figures given
that we already saw the latest inflation data with the US CPI report just two
weeks ago. Tomorrow, we conclude the week with the US ISM Manufacturing PMI
which missed expectations by a big margin the last time.