Following the NFP and ISM Services PMI data on Friday, in terms of technical analysis, the market continues to maintain a bullish bias for the Nasdaq Composite.
The beat on jobs numbers and miss on average hourly earnings, gave the market a reason to speculate on a goldilocks scenario where the labour market remains healthy without wage inflation.
Moreover, the big miss in ISM Services PMI made the market to expect an earlier pause from the Fed in their tightening cycle or even earlier cuts.
There were some expectations that Fed Chair Powell could touch on recent economic data or possibly hint to future monetary policy actions in his speech in Sweden, but he didn’t offer anything, which kept the market bias intact.
The next big event will be the US CPI on Thursday where another miss may send the market even higher, while a beat could make it tank.
Nasdaq Composite (IXIC) Technical Analysis
On the technical side as you can see in the daily chart above, after the price nearly touched the October low at 10096, it went into a consolidation before breaking up to the upside and now eyeing the resistance zone at 10900-11000. That resistance could decide the next movement.
A break to the upside should give buyers control and the next target would be the resistance at 11500 zone. A failure to break that, will give sellers control and they will eye again the October low at 10096 if not even lower.
On the 1-hour chart above, we can see that the price went back to the top of the falling wedge pattern as that’s usually the target once the price breaks out of the wedge. The price failed to sustain the bullish momentum and retraced back to the near-term support (orange line) at 10612 before continuing its upside move.
Drilling down to the 15-minutes chart above, we can see that the bullish bias remains intact, and the buyers should now target the resistance zone at 10900-11000 as the most likely scenario.
If the price falls and breaks down the support at 10612, that would validate the 2nd scenario and give the sellers more control and the next target should be the support at 10311 price level.
