Nasdaq Composite Technical Analysis | Forexlive

Yesterday, the Fed kept interest rates
unchanged as expected but that’s not what the market was looking for going into
the event. The market was focused solely on the Dot Plot and the Fed decided to
validate the market’s dovish pricing projecting a 2024 year-end peak rate at
4.6%. The expectations were for the Fed to keep two rate cuts for 2024, but the
Fed decided to increase that to three, basically agreeing with the market that
rate cuts are coming.

Moreover, Fed Chair Powell didn’t
push back against the strong dovish pricing and even said that they are focused
on not making the mistake of holding rates high for too long, which suggests
that a rate cut could come pretty soon. This gave a strong boost to the Nasdaq
Composite leading to new highs with the sentiment turning heavily bullish.

Nasdaq Composite Technical
Analysis – Daily Timeframe

Nasdaq Composite Daily

On the daily chart, we can see that the Nasdaq Composite
yesterday extended the rally to new highs following the Fed’s pivot. It’s never
a good idea to chase the price, especially when there’s lots of FOMO in the
market, so the buyers might want to wait for a pullback first before taking new
positions.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

Nasdaq Composite 4 hour

On the 4 hour chart, we can see that the breakout
above the cycle high is diverging with the
MACD. This is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we have a trendline
connecting the most recent swing lows and the buyers might want to lean on it
as they will also find the red 21 moving average for confluence.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

Nasdaq Composite 1 hour

On the 1 hour chart, we can see that we
have another minor trendline with a steeper slope. More aggressive buyers might
want to lean on it as they will also have the red 21 moving average for
confluence. More conservative buyers might want to wait for a deeper pullback
into the major trendline where we have also the 50% Fibonacci
retracement level. Alternatively, the buyers could split
their position in half and enter at both the trendlines to avoid missing out on
an eventual rally. The sellers, on the other hand, will likely pile in at every
break lower with a break below the major trendline triggering a stronger
selloff into the 14050 support.