On the daily chart below for the Nasdaq, we can see that the price is breaking above the key 12274 resistance, but the question now is whether or not the buyers will be able to sustain it. The recent economic data has been giving conflicting signals, but the market seems to be leaning on the goldilocks scenario where the labour market remains resilient as shown by the strong NFP report recently and inflation slowly moderates towards the target as shown by the recent CPI coming in at 4.9% Y/Y. The big bullish flag is still valid and if the buyers manage to sustain the breakout, the target would be the 13000 level. A fakeout wouldn’t be good news, but the sellers have more work to do before getting full control.
Nasdaq technical analysis
On the 4 hour chart below, we can see that the price has been ranging just beneath the key resistance for over a month with just one failed probe at the end of April. This breakout is significant but unfortunately it is not sustained by a fundamental catalyst as the big miss in Jobless Claims yesterday should make the market worry about a deterioration in the labour market. Today we have the University of Michigan consumer sentiment report and the market is likely to focus on the inflation expectations figures as those ticked up considerably recently.
On the 1 hour chart below, we can see more closely the range and the recent breakout. The buyers may pile in again if the price pulls back to the broken top of the range. The sellers, on the other hand, will want to see the price falling below the 12172 swing level to start positioning for another possible selloff towards the bottom of the channel.
