The Nasdaq Composite is losing some momentum as we approach the cycle high and many key economic releases in the next few weeks that will culminate in the FOMC rate decision on the 13th of December. The market at the moment is focused mainly on the rate cuts expectations, which continue to support the upside as long as the data doesn’t deteriorate faster.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite has lost some momentum as the index started to consolidate. We can expect some profit taking around these levels after such an incredible rally in November which might also provide a decent pullback for the buyers.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD recently which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it might be a signal that we could indeed see at least a deeper pullback soon. From a risk to reward perspective, the buyers would have a much better setup around the 13700 support where we can also find the confluence with the 38.2% Fibonacci retracement level of the entire rally.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price has been diverging with the MACD since the breakout of the key trendline around the 13700 level. The price yesterday broke below the lower bound of the rising channel which might be the confirmation for the start of the pullback. The sellers are likely to pile in to target the base of the channel around the 14040 level and upon a further break lower, aim for the support zone at the 13700 level.
Upcoming Events
Today, we will get the latest US Consumer Confidence report and it will be interesting to see how the US consumers see the labour market. On Thursday, we will see the US PCE and US Jobless Claims data with the market likely focusing more on the latter given that we already saw the latest inflation data with the US CPI report just two weeks ago. Finally, on Friday, we conclude the week with the US ISM Manufacturing PMI which missed expectations by a big margin the last time.
