The Nasdaq Composite continues to hold into the gains of the past week as the lack of bearish catalysts in the first part of the week kept the buyers in control. From a technical standpoint, the Nasdaq Composite is now at a key resistance level and in this final part of the week we will get some market moving data like the US Jobless Claims and the University of Michigan Consumer Sentiment report. The market participants will be focused on the Jobless Claims data 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 extended the gains in the first part of the week as the lack of fundamental catalysts gave the buyers some free room to the upside. The index is now at a key resistance zone around the 13700 level where we can find the previous swing high and the major trendline. The sellers are likely to step in here with a defined risk above the level to position for a drop into the 12274 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price broke above the minor trendline, retested it and continued higher into the major trendline. The buyers will want to see the Nasdaq Composite breaking higher to invalidate the bearish setup and increase the bullish bets into new highs.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the latest leg higher is diverging with the MACD right around the key resistance. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it’s another layer of confluence for the bearish setup and we are likely to see a pullback into the 13400 level at very least. A break below the 13400 level should confirm the bearish setup and lead to even more selling pressure.
Upcoming Events
This week is pretty empty on the data front with just the US Jobless Claims tomorrow and the University of Michigan Consumer Sentiment on Friday being the only notable events. The market is likely to focus on the US Jobless Claims given the recent weakness in the labour market data. Strong readings are likely to support the Nasdaq Composite, but weak figures should start to really weigh on the risk sentiment as the recessionary fears are likely to increase.
