FUNDAMENTAL OVERVIEW
The Nasdaq nearly tested its November low yesterday as markets kicked off the week in a strong risk-off mood. Sentiment improved later in the day as oil prices fell sharply following the G7’s indication that it may release emergency oil reserves.
In the evening, Trump told CBS that the war could be over soon, triggering a quick relief rally as traders began to look ahead to a possible de-escalation. We haven’t seen a definitive signal yet as Trump noted that the war is unlikely to end this week. Still, downside risks now appear more limited.
Traders will likely start looking for dip-buying opportunities as negative growth expectations continue to be repriced. Once the US or Israel announce that they’ve achieved their objectives or that the nuclear threat is no longer a concern, we should see a strong and sustained rally, with a high chance of new all-time highs after such a long period of consolidation.
NASDAQ TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see the Nasdaq nearly tested the November low yesterday before rebounding strongly. There’s not much we can glean from this timeframe, so we need to zoom in to see some more details.
NASDAQ TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, can see the price is trading in a range between the 24,173 support and the 25,466 resistance. If the rally extends further, we can expect the sellers to step in around the resistance with a defined risk above it to position for a drop back into the support. The buyers, on the other hand, will look for a breakout to increase the bullish bets into a new all-time high.
NASDAQ TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have an upward trendline defining the bullish momentum on this timeframe. The buyers will likely continue to lean on the trendline with a defined risk below it to keep pushing into new highs, while the sellers will look for a break to pile in for a drop back into the support next. The red lines define average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the US CPI report. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US PCE price index, the University of Michigan Consumer Sentiment survey and the Job Openings data. As a reminder, the market focus right now is solely on the US-Iran war, so the data might not matter much.
