Nasdaq Composite Technical Analysis | Forexlive

The Nasdaq Composite continues to retreat from the
cycle high as the market might have gone too far too fast and now needs a
healthy pullback. We could even see some profit taking at these levels ahead of
key economic releases the next week culminating in the FOMC rate decision on
the 13^th of December. The data this week showed further weakening on
the labour market side with the Continuing Claims
yesterday missing expectations by a big margin. The Fedspeak recently has been
mostly neutral with the officials pushing back against rate cuts expectations
with the market now seeing five rate cuts in 2024.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
drop further from the cycle high at 14446. The sellers might start to get
increasingly confident for a deeper pullback while the buyers might start to
take some profits off the table ahead of key economic releases the next week.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD recently.
This is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might be a signal that the market went too far too
fast, and we should see a deeper pullback before the next move. From a risk management
perspective, the buyers will 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 recently broke below the lower bound of the rising channel which increased
even more the odds for a pullback. The first target for the sellers should be the
base of the channel around the 14000 level with a further break lower likely triggering
a selloff into 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, the main event will be the release of the US
ISM Manufacturing PMI which missed expectations by a big margin the last time.
Strong data might support the Nasdaq Composite in the short-term while another
weak report could trigger some selling.