Nasdaq Composite Technical Analysis

Yesterday, the Nasdaq Composite opened higher but ended
the day negative as the profit-taking and the rise in Treasury yields kept on weighing
on the stock market. All eyes continue to be on the FOMC rate decision tomorrow
as there is a risk that the central bank sounds more hawkish than expected in
light of the easing in financial conditions and the recent beats in the
inflation data. There is also a lack of economic data until after the Fed
decision, so we will likely continue to see a rangebound price action in the
meantime.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite bounced from the key trendline where we
had also the red 21 moving average for confluence. That’s
where the buyers stepped in with a defined risk below the trendline and
positioned for a rally into a new all-time high. Unfortunately, the price
continues to be rejected by the strong 16206 resistance where
the sellers keep piling in to position for a break below the trendline with a
better risk to reward setup.

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 having a hard time
breaking the key resistance. The buyers will likely keep on stepping in around
the trendline and the 15859 level to position for a break above the resistance,
while the sellers will look for a break below those levels to increase the
bearish bets into new lows.

Upcoming
Events

Tomorrow we have the FOMC rate decision where the Fed
is expected to keep rates unchanged. On Thursday, we conclude with the latest
US PMIs and Jobless Claims figures.

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