Yesterday, the Nasdaq Composite extended its rally following weaker than expected US PMI indices. Comments were mixed, however, as there was good news on the inflation front but bad news on the labor market. The market was obviously focused on reducing the chances of a more hawkish interest rate path for now, which triggered a relief rally.
Nasdaq Composite Technical Analysis – Daily Timeline
Nasdaq Composite Daily
On the daily chart we can see that the Nasdaq Composite extended its rally yesterday and finally closed the gap with the blue 8 moving average as the market became more balanced after last week’s sell-off. We can see that there is also the 38.2% Fibonacci retracement level which adds a confluence to the moving average. This is where we can expect sellers to step in with a defined risk above the Fibonacci level to position themselves for a fall to new lows. Buyers, on the other hand, will want to see the price move higher to increase bullish bets up to resistance at 15929.
Nasdaq Composite Technical Analysis – 4 Hour Timeframe
Nasdaq Composite 4 hours
On the 4-hour chart we can see that sellers will have an even higher risk of rewarding the setup around resistance 15929 where they will find the confluence of the red 21 moving average and the 50% Fibonacci retracement level. Buyers will want to break through this resistance zone to increase bullish bets to a new all-time high.
Nasdaq Composite Technical Analysis – 1 Hour Timeframe
Nasdaq Composite 1 hour
On the hourly chart we can see that we now have a minor trendline defining the bullish momentum with the blue 8 moving average adding further confluence. We can expect buyers to rely on the trendline to continue pushing the market up to resistance at 15929. Sellers, on the other hand, will want to see the price move below the trendline to increase bearish bets to new lows.
Events to come
Tomorrow we will have the first quarter US GDP and the latest US jobless claims figures. On Friday, we conclude the week with the US PCE report.
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