Yesterday, the Nasdaq Composite ended the day positive amid a lack of bearish catalysts. It might have been one of those times when no news is good news as the geopolitical fears around the Israel-Iran escalation waned. It might also have been just a dead-cat bounce after an oversold market. Nevertheless, the US PMIs and the US PCE this week will be market moving catalysts, and it’s likely that more inflationary pressures could weigh on prices again given the recent shift in the Fed’s stance.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday bounced near the 15162 support and rallied into the 15453 resistance where we can also find the blue 8 moving average for confluence. This is where we can expect the sellers to step in with a defined risk above the resistance to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and position for a rally back into the 15929 level.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the rally into the 15453 resistance with the price rejecting the blue 8 moving average. There’s not much else to glean from this chart, so we need to zoom in to see some more details.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we had a trendline defining the bearish momentum with the red 21 moving average acting as dynamic resistance. The price yesterday broke through it, which might be an early signal of a change in sentiment although we will need to see a continuation to confirm it. In fact, if the price were to fall back below the trendline, we can expect the sellers to pile in and position for a drop into new lows. Conversely, if the price were to continue higher, the buyers will likely increase the bullish bets into the 15929 resistance.
Upcoming Events
Today we have the US Flash PMIs. On Thursday, we get the US Q1 GDP and the latest US Jobless Claims figures. On Friday, we conclude the week with the US PCE report.
