Yesterday, the Nasdaq Composite opened the day higher and after a brief rally the price reversed completely following the strong US ISM Manufacturing PMI report. The US Dollar and Treasury yields rose to the highest levels this year putting some downward pressure on the stock market. Inflation is gradually becoming again the threat for further gains and the expectations for rate cuts continue to dwindle with the market now seeing basically a 50% chance of a cut in June. The Fed might also change its tone to a more hawkish stance.

Nasdaq Composite Technical Analysis – Daily Timeframe

Nasdaq Composite Technical Analysis
Nasdaq Composite Daily

On the daily chart, we can see that the Nasdaq Composite has been diverging with the MACD for a long time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. We continue to trade inside the rising wedge, and it’s worth to keep an eye on it because if the price were to break below the trendline, the sellers will have much more conviction to look for new lows with the base of the wedge at 14477 being the ultimate target.

Nasdaq Composite Technical Analysis – 4 hour Timeframe

Nasdaq Composite Technical Analysis
Nasdaq Composite 4 hour

On the 4 hour chart, we can see that the price is consolidating near the bottom trendline where we have the red 21 moving average for confluence. The buyers keep on stepping in with a defined risk below the trendline to position for a rally into a new all-time high. The sellers, on the other hand, are waiting for the price to break below the trendline to increase the bearish bets and target new lows.

Nasdaq Composite Technical Analysis – 1 hour Timeframe

Nasdaq Composite Technical Analysis
Nasdaq Composite 1 hour

On the 1 hour chart, we can see that the gains have been capped by the counter-trendline and even if we got a brief spike to the upside yesterday, the price fell back below the counter-trendline. The buyers will likely pile in if we get a break to the upside and increase the bullish bets in case we get a break above the 16480 level.

Upcoming Events

Today we have the US Job Openings and tomorrow the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures while on Friday we conclude the US NFP report.