Nasdaq Composite Technical Analysis

Last week, the Nasdaq Composite pulled back into
key levels as the stronger than expected inflation data and the quick rise in
Treasury yields weighed on the stock market. There’s been also some
profit-taking as we approach the FOMC rate decision on Wednesday with the risk
of a hawkish surprise. Overall, the market is likely to remain supported as
long as the Fed does not restart to hike rates, or the economy does not falter.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite pulled back into the key trendline where we
can also find the red 21 moving average for confluence. This is
where we can expect the buyers to step in with a defined risk below the 15859
level to position for a rally into a new all-time high. The sellers, on the
other hand, will want to see the price breaking below the trendline and the
15859 level to increase the bearish bets into the 15453 level.

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 and the 15859 level, 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 more
closely the recent rangebound price action with the price trading right around
the recent lows. The buyers will need to defend the 15859 support as a
break below it will likely trigger a selloff to new lows and increase the
bearish momentum.

Upcoming
Events

This week we have the FOMC rate decision on Wednesday
where the Fed is expected to keep rates unchanged. The market will be on the
lookout for hawkish surprises though following the stronger than expected
inflation data. On Thursday, we conclude with the latest US PMIs and Jobless
Claims figures.

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