Yesterday, the Nasdaq Composite closed the day around the highs once again even after a strong ISM Services PMI report. In fact, besides all the good details, the prices paid index jumped above 60, which might raise inflation fears again, especially with the Fed trying to time the right moment for rate cuts. There’s a general idea that the current situation is bad for bonds but still good for stocks, but even if that’s the case, the probabilities for a bigger correction rise by the day.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday closed the day once again around the highs as the buyers continue to push towards a breakout. The sellers, on the other hand, should continue to step in around the recent high with a defined risk above the level to position for a drop into the trendline and targeting a break below it.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that yesterday we got a downward spike following the strong ISM Services PMI report but the buyers piled in immediately around the red 21 moving average and pushed the price back into the high.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the price bouncing on the 38.2% Fibonacci retracement level near the 15400 support zone. We might keep on consolidating between the 15634 high and the 15400 support until we get a breakout. This gives us two clear trading scenarios though:
- A break to the upside should see the buyers piling in and extend the rally into new highs.
- A break to the downside is likely to trigger a selloff with the sellers targeting the 15150 support.
Upcoming Events
This week is basically empty on the data front with just the US Jobless Claims figures on Thursday as the only notable release where the market will want to see if the resilience in the labour market remains intact.
