Yesterday, the Nasdaq Composite continued to rally as the geopolitical risk decreased given the lack of a ground offence in Gaza and the release of some hostages at the start of the week. Moreover, the US PMIs showed a balanced economy as both the manufacturing and the services sectors are now just a touch above the 50 level which indicates expansion. This is just another data point supporting the soft-landing scenario as even the labour market continues to soften via lower job openings rather than more layoffs.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday continued the rally that began from the bottom trendline and it’s now testing the key 13174 level. We can also notice that the recent leg lower diverged with the MACD which is generally a sign of weakening momentum often followed by pullback or reversals. In this case, a break to the upside should trigger more bullish bets as the buyers will start to target the top trendline around the 13700 level.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the key 13174 level where we have also the 38.2% Fibonacci retracement level for confluence. This is where we can expect the sellers to step in with a defined risk above the level to target another drop into the bottom trendline aiming for a breakout.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the inverted head and shoulders highlighted yesterday seems to be working out with the break above the minor trendline and the crossover of the moving averages sustaining the bullish setup. The buyers will just need to take out the 13174 resistance to gain more conviction and target the 13700 level.
Upcoming Events
Tomorrow, we will see the US Jobless Claims data with the market likely focusing on the Continuing Claims figures as they’ve been recently showing some softness. On Friday, we will get the US PCE report, which is not expected to change anything for the Fed at this point in time.
