Nasdaq Composite Technical Analysis | Forexlive

Yesterday, the Nasdaq Composite had a positive day
following the release of two key economic reports. The US ISM Services PMI beat
expectations with the services sector holding on in expansion while the US Job Openings fell
much more than expected. Overall, it was a good day for the soft-landing fans
as the drop in Job Openings shows that the labour market is softening via less
jobs rather than more layoffs, which is good news for inflation and growth.
Such downtrends in job openings though happen around the turns in the cycles
which are eventually followed by recessions. We will see if this time is indeed
different…

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
pulled back into the red 21 moving average where we
got a bounce as the buyers stepped in. Was this the best we could get as a
pullback? Time will tell, but at the moment the buyers are still in control as
we need other key breaks to the downside to turn the bias more bearish.

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 got a pullback recently with the buyers stepping in
already around the lows of the divergent formation and the daily 21 moving
average. From a risk management perspective though, the buyers would have a
much better risk to reward setup at the 13700 support where we
can also find 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 rallied into the minor counter-trendline where
the price got rejected as the sellers continue to pile in around these levels
targeting a bigger correction. The buyers will want to see the price breaking
higher to increase the bullish bets into the cycle high and targeting a
breakout.

Upcoming
Events

Today we have another US labour market report with
the release of the US ADP data. Tomorrow, it will be the time for the US
Jobless Claims figures, while on Friday we conclude the week with the NFP
report.