The Nasdaq Composite this week rallied into a key swing level following the miss in the US CPI report. The market is still trading based on the inflation and interest rates expectations and ignoring the deteriorating labour market and growth data. The lack of a rally following the better than expected US Retail Sales data and the miss in the US PPI and Jobless Claims figures though, might be a sign that the rally got overstretched and we could see at least a pullback.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite is consolidating just below a key swing level at 14155 after an incredible rally following the miss in the US CPI report. We can also notice that the price got a bit overstretched as depicted by the distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move.
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 support zone around the 13700 level where they will also find the red 21 moving average for confluence. The sellers, on the other hand, are likely to step in already at these levels with a defined risk above the high to position for a drop into the 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. In this case, the buyers might also want to lean on the upward trendline where there’s also the 38.2% Fibonacci retracement level for confluence. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the support zone.