Nasdaq Composite Technical Analysis | Forexlive

Last Friday, the Nasdaq Composite rallied despite
the ISM Manufacturing PMI missing
expectations and falling further into contraction. The market is still trading
based on rate cuts expectations as the trigger for the rally was a neutral Fed Chair Powell speech
where he didn’t push back against the market’s pricing. The market seems to be
all-in on the soft-landing trade and ignoring the weakening economic data,
especially on the labour market side. The sentiment is also getting a bit bubbly
right when things might really go south, so the buyers might want to be extra
cautious going forward.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
failed to rally as much as the other major indices as it continues to
consolidate just below the cycle high at 14446. From a risk management
perspective, it doesn’t make much sense buying at these levels both from a
fundamental and technical point of view. We could see some more profit taking
which could lead to a decent pullback, while the sellers should continue to
pile in here with a defined risk above the cycle high to target a drop into new
lows.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD into the
cycle high. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. We indeed got a pullback with the buyers already piling
in near the most recent swing low, but right now there’s not much to do as
there’s no significant level to lean on.

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 key resistance
zone around the 13700 level. The sellers should lean on the cycle high to
target a drop into new lows and increase the bearish bets with breaks below the
14050 and 13700 supports. The buyers, on the other hand, will want to lean on
those same supports to position for new highs.

Upcoming
Events

This week we will see lots of US labour
market data culminating with the NFP release on Friday. Tomorrow, we have the
ISM Services PMI and the US Job Openings reports. On Wednesday, we will get the
US ADP data. On Thursday, it will be the time for the US Jobless Claims
figures, while on Friday we conclude the week with the NFP report.