Yesterday, the Nasdaq Composite extended the fall with all the gains from the Fed pivot now basically erased. The economic data didn’t help the market either with the inside data in the US ISM Manufacturing PMI painting a weaker picture than the headline beat and the US Job Openings coming in lower than expected with the hiring rate now below the pre-pandemic levels. There are still key data to be released this week, but the new year is starting on a negative note.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite dropped below the swing low around the 14770 level and the red 21 moving average. This has opened the door for a bigger fall into the 14050 level. The sellers are likely to keep piling in, especially if the data continues to disappoint, while the buyers will need the price to rise back above the 14770 level to get back some conviction.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the Nasdaq Composite has been trading inside a rising channel with the lower bound of the channel being a strong support zone given that we had also the confluence with the swing low and the 38.2% Fibonacci retracement level. This support zone got breached with more bearish bets piling in to target the 14050 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action and the support zone around the 14770 level. From a risk management perspective, a pullback into the support now turned resistance will offer a better risk to reward setup with the sellers finding also the red 21 moving average for confluence.
Upcoming Events
Today we will have another slate of US labour market data with the release of the US ADP and Jobless Claims figures. Tomorrow, we conclude the week with the NFP report and the ISM Services PMI.
