Nasdaq Composite Technical Analysis

Yesterday, the Nasdaq Composite ended the day around
the highs as the market continues to look through the beat in the US CPI report.
As previously mentioned, the path of least resistance looks to be to the upside
as long as growth remains pretty much stable, and the Fed doesn’t restart
tightening. In the first case, the labour market will need to keep on being
resilient, while in the second case, inflation should not start trending higher
so much that the Fed is forced to change course.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite is consolidating around the highs. From a risk management perspective
though, the buyers will have a much better risk to reward setup around the trendline where we
can also find the red 21 moving average for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and increase the bearish bets into new lows.

Nasdaq Composite
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price 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 can also notice that the price action formed what
looks like a 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 – 1 hour Timeframe

On the 1 hour chart, we can see that the price
is now trading in a “mini” range between the 16145 support and the 16270
resistance. A break to the upside should lead to a rally into new highs, while
a break to the downside is likely to trigger a drop into the trendline.

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