Last Friday, the Nasdaq Composite surged to new highs following the strong University of Michigan Consumer Sentiment report as the market continues to see a goldilocks economy. In fact, the US Jobless Claims have been improving and Retail Sales surprised to the upside. Moreover, we have the US PCE data on Friday where we will likely see another soft figure. On the other hand, the strong economic data is making the market to price out the rate cuts, which might eventually dent the economic and the stock market performance.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite last Friday surged to new highs following the strong consumer sentiment report. We can also notice that the price is diverging with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we might see at least a pullback after such a strong rally which would also give the buyers a better risk to reward setup.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price bounced on the key 14780 level where we had also the confluence with the 50% Fibonacci retracement level and the red 21 moving average before surging into new highs. We can notice that the price is now a bit overstretched as depicted by the 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.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that from a risk management perspective, the buyers will a have better risk to reward setups around the two trendlines. In fact, in the first case, aggressive buyers might want to lean on the steeper trendline where they will find the confluence with the previous highs and the 4-hour 8 moving average. More conservative buyers might want to wait for the price to fall into the major trendline before increasing the bullish bets. The sellers, on the other hand, will likely pile in at every break lower to target a break below the key 14780 support.
Upcoming Events
This week is a bit more tranquil on the data front with the major releases scheduled for the final part of the week. We begin on Wednesday with the US PMIs while on Thursday we will see the Advance US Q4 GDP and the latest US Jobless Claims figures. Finally, on Friday we conclude the week with the US PCE report.
