Yesterday, the Nasdaq Composite finished the day around the all-time high as the market opened higher and continued to rally for most of the trading session. There was no real catalyst for the move, so it could just have been dip-buyers entering the market to fade the losses from the prior days. Today, we have the US NFP report on the agenda where we will see if the labour market remains resilient or there is more weakness under the hood.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite bounced on the red 21 moving average and managed to rally back above the trendline and eventually reached the all-time high again. This is where we can expect the sellers to step in again with a defined risk above the high to position for a break below the trendline and target the 15453 level. 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 – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD for a long time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. We can also notice that the price action formed a rising wedge, so if the price breaks below the trendline, the sellers will have much more conviction to look for new lows with the base of the wedge at 14477 being the ultimate target.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that if the price were to pull back from the high, the buyers will find a strong support zone around the 16140 level where we can find the confluence of the major trendline, the minor black trendline, the 50% Fibonacci retracement level and the red 21 moving average. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and increase the bearish bets into new lows.