Fundamental Overview
The Nasdaq has been on the backfoot recently as the goldilocks data led to a strong rotation into small caps stocks. Yesterday, there was general weakness across all the indices although it wasn’t triggered by any catalyst. The fundamentals haven’t changed, on the contrary, they strengthened the case for a soft landing. The bearish momentum seems to be waning going into the weekend, so the technicals might be helpful for the dip-buyers to time a possible bounce.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq is now near the trendline around the 19700 level. This is where can expect the dip-buyers to step back in with a defined risk below the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the next major trendline around the 19000 level.
Nasdaq Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a good resistance zone now around the 20300 level where we can find the confluence of the downward trendline and the 50% Fibonacci retracement level.
If we get a bounce from the 19700 support zone, we can expect the sellers to step in around the downward trendline to position for a break below the 19700 support with a better risk to reward setup. The buyers, on the other hand, will want to see the price breaking above the downward trendline and the 20300 resistance to increase the bullish bets into new highs.
Nasdaq Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have another minor downward trendline defining the current bearish momentum. The sellers will likely keep on leaning on it to push towards the break below the 19700 support.
The buyers, on the other hand, will want to see the price breaking above the trendline and the most recent lower high at 19980 to gain even more confidence and increase the bullish bets into the 20300 resistance. The red lines define the average daily range for today.
