Yesterday, the Nasdaq Composite erased all the losses from the Fed’s selloff as the market continues to trade the goldilocks economy. In fact, the ISM Manufacturing PMI surprised to the upside with the new orders index, which is regarded as a leading indicator, jumping back into expansion. Moreover, after the close we had some good earnings reports from the big names with META not only tripling profits but even announcing its first-ever dividend. Today all eyes will be on the US NFP report which is expected at 180K with estimates ranging from a low of 120K to a high of 290K.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday bounced from the key support zone around the 15150 level where we had the confluence of the trendline, the 38.2% Fibonacci retracement level and the red 21 moving average. This is where the buyers stepped in with a defined risk below the trendline to position for a rally into new highs. The sellers, on the other hand, will want to see the price reversing and breaking below the trendline to invalidate the bullish trend and position for a drop into the 14477 level.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the bounce from the support at the 15150 level. Given the strong gains after the close from the major stocks, we can expect the index to open around the highs. The buyers might want to pile in to join the bullish momentum and look for new higher highs. The sellers, on the other hand, could fade the reaction to the earnings and position short with a defined risk above the high looking for a break below the trendline.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we had an important level around 15400 where there was also the confluence with the red 21 moving average and the 50% Fibonacci retracement level. If we get a pullback from the highs, the buyers will likely lean on the level as they will have a better risk to reward setup to target new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.
