Last Friday, the Nasdaq Composite Index ended the day on a positive note, with the US PCE report mostly in line with expectations. The market has already priced in almost all of the rate cuts expected at the start of the year and is now only expecting one in September or December. This means we will need more worrisome data to start pricing in a rate hike and put more downward pressure on the market. For now, dip buyers are in control again as we continue to erase losses from earlier in the month.
Nasdaq Composite Technical Analysis – Daily Timeline
Nasdaq Composite Daily
On the daily chart we can see that the Nasdaq Composite has reached a key resistance zone around the 15929 level where we also find the confluence of the 50% Fibonacci retracement level and the red 21 moving average. is where sellers will likely step in with a defined risk above the moving average to position themselves for a fall to new lows. Buyers, on the other hand, will want to see the price move higher to invalidate the bearish setup and increase bullish bets to a new all-time high.
Nasdaq Composite Technical Analysis – 4 Hour Timeframe
Nasdaq Composite 4 hours
On the 4-hour chart, we can see that price has been stretching a bit too much, as shown by the distance from the blue moving average of 8. In such cases, we can usually see a pullback towards the average moving or some consolidation before the next move. In this case, this would also fit with the bearish setup, as we could see at least a rejection from the resistance zone.
Nasdaq Composite Technical Analysis – 1 Hour Timeframe
Nasdaq Composite 1 hour
On the hourly chart, we can see that the price action towards the resistance level could have formed a bearish flag, but we will need to see the price cross the lower trendline to confirm this. In the event of a downward breakout, the measured target would be around the 14,700 level.
Events to come
Tomorrow we have the first quarter US employment cost index and the consumer confidence report. On Wednesday we have US ADP, ISM manufacturing PMI, job postings and the FOMC rate decision. On Thursday we will see the latest figures for jobless claims in the United States. On Friday, we conclude the week with the American NFP and the ISM Services PMI.
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