The Nasdaq Composite yesterday opened higher and surged to new highs following the miss across the board in the US CPI report. The stock market seems to still be trading on the rates expectations and anything that brings forward rate cuts triggers a strong rally. The weakening growth and high chances of a recession ahead are ignored by the market at the moment. It’s hard for the bears to stand in the way of this incredibly strong bullish momentum.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite opened higher following the miss in the US CPI report and the price is now near the swing high at 14150. The market yesterday might have just confirmed the breakout of the major bullish flag. The target in this case would be near the all-time highs. Given the very overstretched levels, we can expect a pullback which the buyers will be eagerly to buy.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the recent breakout above the 13700 swing high resistance and the trendline. The sellers are likely to step in around the 14150 level with a defined risk above it to position for a drop back into the resistance turned support and hoping for a break lower.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is diverging with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. The buyers are likely to lean on trendline where they will have the confluence with the red 21 moving average and the 38.2% Fibonacci retracement level. The sellers are likely to increase the bearish bets if the price breaks below the trendline, but the buyers will have another opportunity at the 13700 support zone.
Upcoming Events
Today, we have the US Retail Sales and PPI data with the market likely giving more importance to the Retail Sales data. Tomorrow, we will see the latest US Jobless Claims figures where the market will want to see how fast the labour market is softening.
