Last Friday, the Nasdaq Composite rallied strongly for no apparent reason with the market seemingly careless about the US CPI release tomorrow. Overall, the path of least resistance remains to the upside given the pickup in economic data with even the leading indicators turning around. There are still risks on the inflation front though, but the market looks confident that even if we see some short-term reacceleration, the Fed will just keep rates steady and if the economy is able to support them, then it might be even better. Nonetheless, a hot CPI report could provide a pullback, so that would be something to watch out for.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite is approaching fast the all-time high as the buyers can now clearly see their target. From a risk management perspective, the buyers will have a much better risk to reward setup around the trendline where they will also find the red 21 moving average for confluence. The sellers, on the other hand, will want to see the price breaking below the trendline to change the overall bias from bullish to bearish and start targeting new lows.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that in case we get a pullback, the buyers will have two key support zones where they can lean onto. The first one will be the resistance now turned support around the 15635 level where they will also find the confluence with the 38.2% Fibonacci retracement level and the red 21 moving average. The second one will be around the trendline where there will be the confluence with the daily 21 moving average and the 61.8% Fibonacci retracement level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor trendline which is defining the current uptrend with the red 21 moving average acting as dynamic support. This is where aggressive buyers are likely to lean onto to position for new highs while the sellers will want to see the price breaking lower to pile in and target a pullback into the 15635 support and the major trendline.
This week is relatively light on the data front with the US CPI report being the main highlight. We start tomorrow with the release of the US CPI where the market will want to see if there are indeed signs of a reacceleration or not. On Thursday, we will get the latest US Jobless Claims figures, while on Friday we conclude the week with the US PPI and the University of Michigan Consumer Sentiment survey.