Perhaps most importantly for the technical analysis for the Nasdaq Composite, the market reacted positively to the beat in the NFP data and the miss in Average Hourly Earnings and the ISM Services PMI. The Fed Chair Powell has not touched on monetary policy or recent set of data and the CPI report came out as expected.

Overall, the market interpreted the recent developments as good news with inflation moderating and the labour market remaining strong. The “soft landing” narrative is again in the front seat and it’s driving the stock market to new highs.

The China reopening may also be a contributor as the market may expect global growth to hold on in the short-term, but it may also reignite inflationary pressures and make the Fed’s job harder.

For now, the market is looking only to the good side of things, and it will probably need really bad data on the growth side to change the sentiment.

Nasdaq Composite Technical Analysis

On the daily chart above, the price has breached to the upside the resistance zone in the 10900 price region. The target for the bulls now would be the resistance in the 11500 price area. A failure to sustain the bullish momentum and a fall below 10900 would give the bears control again.

On the 1-hour chart above, we can see that the price is indeed struggling sustaining the bullish momentum as depicted by the rising wedge pattern and the price divergence with the RSI. This is ominous for the bulls as the price is breaking out of the wedge and may fall below the 10900 level.

Zooming in to the 15 minutes chart above, we can see that the bulls would need to break the 11143 level and keep charging to invalidate the wedge pattern and target the resistance at 11500.

On the other hand, a break below the 11027 level would give the bears more control and a further fall below the 10900 support level should signal the resumption of the bearish trend.