The Nasdaq Composite opened higher yesterday
following the less hawkish than expected Fed decision where the central bank left interest rates unchanged once
again and Fed Chair Powell said
that they “have not yet made any decision on future meetings” suggesting that
they may not hike at all anymore.
On
the data front, yesterday the US
Jobless Claims missed expectations once again with Continuing
Claims now rising at a fast pace. At this point, it’s hard to see the Nasdaq Composite rallying on bad
data as the recession becomes more likely, but the market might like it in the
short-term because it would decrease Treasury yields and increase rate cut
odds. Anyway, the technicals should help in determining the most likely
direction with the key levels in place.
Nasdaq Composite Technical
Analysis – Daily Timeframe
Nasdaq Composite Daily
On the daily chart, we can see that the Nasdaq
Composite opened higher yesterday as the positive risk sentiment from the FOMC
meeting extended to the following day. The price broke above the key 13174 resistance, and it
now looks likely that the buyers could reach the trendline around
the 13400 level. That’s where we can expect the sellers to step in more
aggressively as they will have a much better risk to reward setup to position
for a drop into the 12274 support.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
Nasdaq Composite 4 hour
On the 4 hour chart, we can see more closely the
upside gap above the 13174 resistance. We can also notice though, that the
price is a bit overstretched as depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
Nasdaq Composite 1 hour
On the 1 hour chart, we can see that the
buyers would have a much better risk to reward setup if they waited for a
pullback into the minor upward trendline where they will also find the 38.2% Fibonacci
retracement level and 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 position for a drop into the 12274
support.
Upcoming
Events
Today, we conclude the week with the US NFP report
and the ISM Services PMI.