Last Friday, the Nasdaq Composite closed the day at the highs following a surprisingly strong NFP report. The headline number was much higher than even the most optimistic estimates with the unemployment rate ticking lower. There were also some bad things though like the plunge in Average Weekly Hours which contributed to push higher Average Hourly Earnings and the Household survey showing job losses for the second consecutive month.
In fact, even Fed’s Goolsbee mentioned this detail saying that “despite the brisk hiring numbers, weakness in overall hours worked suggests that this wasn’t as strong as that headline number suggested. There are big seasonal adjustments in January and the data might have been distorted a bit which makes trusting this report a little harder.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite finished last week at the highs following a strong bounce from the 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.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the current situation with the price now right at the highs. The sellers are likely to step in here with a defined risk above the level to position for a drop back into the trendline and target a breakout. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we had an important level around 15400 where the buyers and sellers leant onto to express their views. 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 the trendline.
Upcoming Events
This week is basically empty on the data front with just a couple of key economic releases. Today we have the US ISM Services PMI where the market will likely focus on the employment index given the big drop last month. On Thursday, we will see the latest US Jobless Claims figures where the market will want to see if the resilience in the labour market remains intact.
