Last week, the Nasdaq Composite finished on a positive note as the lack of bearish catalysts kept the market supported. Today, the futures market opened higher following the good PCE report last Friday when the market was closed for holidays. Therefore, we can expect to see a positive gap at the open. Overall, the path of least resistance remains to the upside with the main two risks for the bullish sentiment being a reacceleration in inflation leading to a hawkish Fed or a hard landing.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite 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 continue to trade inside the rising wedge, and it’s worth to keep an eye on it because if the price were to break 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 – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently bounced near the bottom trendline where we had the confluence of the red 21 moving average. The buyers keep on stepping in with a defined risk below the trendline to position for rallies into new all-time highs. The sellers, on the other hand, will want to wait for the price to break below the trendline before considering short positions.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price has been consolidating beneath a counter-trendline recently. The futures market opened higher today, so we might see the same for the cash market, in which case the price would effectively break above the counter-trendline. The buyers will likely pile in immediately to position for a rally into new highs.
Upcoming Events
This week we get the release of many key economic data. We begin today with the US ISM Manufacturing PMI. Tomorrow, we have the US Job Openings. On Wednesday, we get the US ADP and the US ISM Services PMI data. On Thursday, we will see the latest US Jobless Claims figures, while on Friday we conclude with the US NFP report.
