Last Friday, the Nasdaq Composite pulled back a bit after the incredibly strong Nvidia induced rally as we probably saw some profit taking. On the economic data side, we got another slate of strong data last Thursday with the US Jobless Claims and US PMIs beating expectations. The Fed members continue to repeat that they want to see a couple more of inflation reports before deciding on rate cuts, but they keep on reiterating that cuts are coming this year. Overall, the path of least resistance remains to the upside.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite pulled back a bit after coming very close to the all-time high. From a risk management perspective, the buyers will have a much better risk to reward setup around the trendline where we can also find the red 21 moving average for confluence. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and position for a drop into the 15150 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD for a long time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we got pullbacks into the bottom trendline where the price kept on bouncing from as the buyers continued to pile in. We can also notice that we might have formed a rising wedge right at the all-time high. It will be important for the buyers to break out into new highs as a break lower could trigger a selloff into the base of the wedge at 14477.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a support zone around the 15900 level where we can also find the 38.2% Fibonacci retracement level for confluence. This is where we can expect the buyers to pile in with a defined risk below the trendline to target a new all-time high. The sellers, on the other hand, can only wait for a break below the trendline to position for a bigger drop into the 14477 level.
Upcoming Events
This week we have some important economic data on the agenda. We begin tomorrow with the release of the US Consumer Confidence report. On Thursday, we will see the US PCE and the latest US Jobless Claims figures. Finally, on Friday, we conclude the week with the US ISM Manufacturing PMI.
