The Nasdaq Composite surged to new highs following the miss in the US CPI report. Looks like the market is still trading based on the inflation and interest rates expectations and ignoring the softening in the labour market and growth data. Yesterday, the US Retail Sales were more tepid compared to the prior months, but they still came out better than expected, and the US PPI data missed forecasts by a big margin across the board. The bears are having a hard time to fight this positive sentiment and perhaps it will take a clear uptrend in the unemployment rate to switch the market’s focus.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite reached the key swing level at 14155 after an incredible rally following the miss in the US CPI report. The price looks overstretched as depicted by the distance from the blue 8 moving average. In such instances, we can generally see a pullback or some consolidation before the next move. The sellers are likely to step in here with a defined risk above the level to position for a drop back into the 13700 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that in case we get a pullback, the buyers might want to lean on the upward trendline where they will also find the blue 8 moving average for confluence. The sellers, on the other hand, will want to see the price breaking below the trendline to increase the bearish bets into the 13700 support.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is diverging with the MACD right at the key resistance. This is generally a sign of weakening momentum often followed by pullbacks or reversals. We can also see that the buyers will have the confluence with the 38.2% Fibonacci retracement level and the red 21 moving average around the trendline. If the price breaks below the trendline, the bullish setup would be invalidated, and the buyers will likely wait at the 13700 support next.
Upcoming Events
Today the market’s focus will be on the latest US Jobless Claims figures given the recent softening in the labour market data.
