Nasdaq Composite Technical Analysis

Last Friday, the Nasdaq Composite extended the
pullback from the highs reached after a strong rally triggered by the FOMC decision. This
might have been just a profit-taking move from overstretched levels as nothing
has changed in the data as we got strong US Jobless Claims figures
and good US PMIs. Looking
ahead, we are approaching a new month where we get the key economic data
including the US CPI. The path of least resistance though remains to the upside
until the labour market cracks or the reacceleration in inflation gets
confirmed and we get some hawkish repricing in interest rates expectations.

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, so 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
from a risk management perspective, the buyers will have a much better risk to
reward setup around the bottom trendline where they will find the confluence of the
red 21 moving average and
the 50% Fibonacci
retracement level. The sellers, on the other hand,
will want to see the price breaking lower to start targeting new lows.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor support zone
around the 16370 level where we can find the confluence of the minor trendline,
the red 21 moving average and the 38.2% Fibonacci retracement level. This is
where we can expect the buyers to step 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 position for a break
below the major trendline with a better risk to reward setup.

Upcoming
Events

This week is going to be shortened by the US Holiday on
Friday. Tomorrow, we have the US Durable Goods and Consumer Confidence reports.
On Wednesday we have Fed’s Waller speaking. On Thursday, we get the latest US
Jobless Claims figures, while on Friday we conclude with the US PCE report and
Fed Chair Powell.

This article was written by FL Contributors at www.forexlive.com.