Yesterday, the Nasdaq Composite opened lower but recovered most of the losses ending the day basically flat. At the moment, there’s some consolidation going on probably due to uncertainty around the upcoming economic data. The market rallied strongly in November as the rate cuts pricing became more and more aggressive, but this wave of euphoria might reverse quickly if the data starts to point to a hard landing. This week might be key for the Nasdaq Composite as we are not only at an important technical level, but we are also going to see lots of US labour market data.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite pulled back to the red 21 moving average where we got a bounce yesterday. Looking at how things have been going recently, this might even be ironically the “biggest” pullback we will see before another rally. There will be important levels to watch out for on lower timeframes which might or might not increase the chances for the rally.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD into the cycle high. This is generally a sign of weakening momentum often followed by pullbacks or reversals. We indeed got a pullback with the buyers already piling in near the most recent swing low. This move lower though gave us an early lower low with the moving averages crossing over.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we got the drop into the support zone around the 14050 level yesterday. The buyers immediately stepped in, and we could see a rally back into the minor downward trendline where we will likely find the sellers waiting to enter the market and target a break below the 14050 level. A break below the support should trigger a selloff into the next key support around the 13700 level where we will also find the 38.2% Fibonacci retracement level of this entire November rally.
Upcoming Events
This week we will see lots of US labour market data culminating with the NFP release on Friday. Today, we have the ISM Services PMI and the US Job Openings reports. Tomorrow, we will get the US ADP data. On Thursday, it will be the time for the US Jobless Claims figures, while on Friday we conclude the week with the NFP report.
