The Nasdaq Composite continues to climb as the market is starting to look past the war between Israel and Hamas. The geopolitical risk has always been around a bigger escalation with Iran, but it looks like the war will remain confined to the Levant. On the domestic side, the US Consumer Confidence yesterday fell again although it beat expectations, and the Employment Cost Index showed that wage growth picked up in Q3 although the market might see it as old news given the recent softening in the labour market data. Overall, the data is not supportive for a sustained rally, so the buyers should be careful.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday broke above the bottom trendline which raises the odds of a bigger pullback into the 13174 resistance. The buyers might have a bit more confidence now, while the sellers will want to see the price falling back below the trendline before increasing the bearish bets and target the 12274 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is breaking above a strong resistance zone where we had the confluence with the broken bottom trendline, the Fibonacci retracement levels, the previous swing low and the downward minor trendline. A break above the 50% Fibonacci retracement level should confirm the breakout and give the buyers even more conviction to target the 13174 resistance.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the resistance zone with the 50% Fibonacci retracement level as the upper limit. More conservative sellers may want to wait for the price to break below the counter-trendline before increasing the bearish bets into the 12274 support, but for now the odds are in favour of a rally into the 13174 resistance.
Upcoming Events
This week, we will get lots of tier one data points with the US labour market and the FOMC decision in focus. Today we have the US ADP, the ISM Manufacturing PMI, the US Job Openings data and the FOMC rate decision. Tomorrow, we will get the US Jobless Claims data, while on Friday we conclude the week with the US NFP report and the ISM Services PMI.