Yesterday, the Nasdaq Composite increased further its gains following the better than expected US Jobless Claims as the market continues to be supported by the goldilocks economy. There’s no notable event now until the US CPI report next Tuesday, so it won’t be surprising if we start to see a pullback as some profit taking into the data should be expected.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite broke the resistance at 15635 and rallied to new highs. The index is approaching the all-time high mark and that’s certainly what the buyers are targeting at the moment. If we get a bigger pullback from here, we can expect the buyers to lean on the trendline to position for the all-time high. The sellers, on the other hand, will want to see the price breaking below the trendline to invalidate the bullish setup and position for a drop into the 14477 level.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price continues to diverge with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it should be a signal for a pullback at least into the resistance now turned support at 15635. From a risk management perspective, the buyers shouldn’t chase this rally and wait for a pullback to either the support or the trendline. The sellers, on the other hand, will want to see some downside breaks before stepping in and target new lower lows.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price action after the breakout has been choppy with weak momentum. This should be a sign that the market is primed for a pullback. The buyers will step in both at the 15635 support and the trendline, while the sellers will pile in at every break lower.
