The Nasdaq Composite yesterday held all the gains from last week as the economic calendar remains poor until the final part of the week. The technicals are likely to lead the price action in the days ahead with the attention turning to the US Jobless Claims data on Thursday as the market will want to see how fast the labour market is weakening.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday retested the broken minor trendline as the buyers continue to remain in control. The price is now overstretched as depicted by the distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before a continuation.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the break and retest of the minor trendline. The buyers should be targeting the major trendline where we can also find a key swing level at 13700. In case the price gets there, the sellers are likely to step in more aggressively with a defined risk above the trendline to position for a drop into new lows.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that in case the price extends to the 13700 level, we will probably have a divergence with the MACD. That would be a sign of weakening momentum, which is often followed by pullbacks or reversals. From a risk management perspective, the buyers would be better off waiting for a pullback instead of chasing the rally at these stretched levels. The sellers, on the other hand, will have a great risk to reward setup around the 13700 resistance.
Upcoming Events
This week is pretty empty on the data front with just the US Jobless Claims on Thursday and the University of Michigan Consumer Sentiment on Friday. The market is likely to focus on the US Jobless Claims on Thursday given the recent weakness in the labour market data.