Nasdaq Composite Technical Analysis

Yesterday, the Nasdaq Composite finished the day basically
flat as the market might be waiting for the US CPI release tomorrow before
taking a direction. In fact, another hot report could change the near-term
Fed’s strategy and trigger a hawkish reaction putting more pressure on the
stock market. On the other hand, data in line with expectations or even lower
will likely lead to a positive risk sentiment driving the market to new
highs.

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. The price recently broke out of the rising wedge which
opened the door for a bigger correction into the 14477 level. The price has
been consolidating around the highs for quite some time now and we will likely
need to wait for the US CPI report tomorrow to decide where to go next.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the
price last Friday rallied following the goldilocks NFP report and it’s now
trading back above the critical 16206 level. If the price were to continue
lower and fall below the 16206 level again, we can expect the sellers to pile
in more aggressively to extend the drop into the first support level
at 15929. That’s also where we can expect the buyers to step in with a defined
risk below the support to position for a rally back into a new all-time high.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the price getting rejected several times
from the black counter-trendline except
the fakeout on the 4th of April. We got yet another rejection
yesterday as the price continued to consolidate just beneath the
counter-trendline. The market might be waiting for the US CPI release before
taking a direction and even if we get a breakout, the buyers will need to be
careful as a hot report could trigger a strong selloff.

Upcoming
Events

Tomorrow we have the US CPI report which will likely
decide if the Fed is going to delay rate cuts further. On Thursday, we get the
US PPI and the latest US Jobless Claims figures. Finally, on Friday we conclude
the week with the University of Michigan Consumer Sentiment survey.

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