On the daily chart below for the Nasdaq, we can see that the market consolidated just below the key 12274 resistance. The moving averages are still crossed to the upside keeping the bullish trend intact, but they are starting to converge as the rangebound price action has been going on for almost a month now.
The latest economic data are not supportive for the bulls as the US Retail Sales missed expectations across the board and the Jobless Claims keep showing increases week after week. Today the market will focus on the US PMIs and if those miss expectations as well, then we may see the trend turning around.
Nasdaq technical analysis
On the 4 hour chart below, we can see more closely the consolidation below the key resistance. The moving averages on this timeframe have crossed to the downside, although they are not a reliable signal in a range.
The market is still uncertain where to go next, so the economic data will be very important. The buyers will need to see benign data, while the sellers will want to see more deterioration.
On the 1 hour chart below, we can see the clear range created just below the key resistance. Generally, it’s best to sit out when the market starts ranging and wait for a clear breakout supported by a fundamental catalyst. Today we have the US PMIs so we may have a catalyst, but the price will also need to break on either side before the buyers and sellers can join.
A miss in the data with the price breaking lower would give the sellers conviction to pile in and target the swing low at 11650. A beat and the price breaking above the top of the range will give the buyers conviction to jump onboard and target the next resistance at 13100.
