Yesterday, the Nasdaq Composite remained on the back foot as the correction that began last week seems to have more room to go. As of now, the data has been overall positive with the US ISM Manufacturing PMI beating expectations and US Job Openings missing forecasts. Moreover, yesterday we got a beat in the US ADP and US Jobless Claims data. If the data remains positive, we can expect the market to bounce back once the froth from the aggressive rate cuts expectations gets unwound. Today, is an important day as we get the release of the US NFP and the US ISM Services PMI.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite extended the drop yesterday as traders are now eyeing the 14050 level. The selloff got a bit overstretched as depicted by the price distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move. A lot will depend on today’s data releases.
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. Once the price broke the support zone, the sellers increased their bearish bets to target a drop into 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 that has now turned into resistance. We can see that we have a minor trendline defining the downtrend on this timeframe. The sellers should keep on leaning on it while the buyers will want to see the price breaking higher to pile in and target a pullback into the 14770 resistance, which will also be the last line of defence for the sellers.
