Last week, the Nasdaq Composite got under pressure amid geopolitical fears and a general risk off sentiment. The latest developments saw Israel retaliating against Iran but the latter downplaying the airstrikes. This episode might be behind our backs, although it’s worth to keep an eye on it if it were to become a concern again. On the macro side, the Fedspeak turned more hawkish, especially in the latter part of the week as the inflation progress looks to be stalled. Overall, the last week had plenty of bearish catalysts weighing on the market, so we will probably need some positive data on the inflation front this week to turn the sentiment around.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite broke through another key level at 15453 and extended the selloff into the 15162 support. 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. The buyers might start to pile in more aggressively around these levels to position for a rally into a new all-time high with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into next support at 14477.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price got overstretched on this timeframe as well. The buyers might want to start piling in around these levels or wait for a catalyst which could be either the Flash US PMIs tomorrow or the US PCE on Friday. The sellers should continue to sell the rallies though to position for the ultimate target around the 14477 level. There’s not much else to glean from this chart, so we need to zoom in to see some more details.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a trendline defining the current downward momentum where we can find the red 21 moving average for confluence. If we get a pullback, we can expect the sellers to step in around the trendline with a defined risk above it to position for new lows. The buyers, on the other hand, will want to see the price breaking higher to pile in and position for a rally into the 15929 level.
Upcoming Events
This week is a bit empty on the data front with just a few notable releases. We begin tomorrow with the US PMIs. On Thursday, we get the US Q1 GDP and the latest US Jobless Claims figures. On Friday, we conclude the week with the US PCE report.
