The Nasdaq Composite this week held into last week's gains as the lack of economic releases and the Thanksgiving Day holiday contributed to a steady risk sentiment. On the data front, the US Jobless Claims on Wednesday beat expectations across the board, which is a good thing for the market at the moment given some recession fears, although one beat after a series of misses doesn’t change the trend. Today, all eyes will be on the US PMIs, but given the early closure for Black Friday we might not see much movement, unless the data surprises.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite is now close to the cycle high at 14446 after an incredible rally that erased 3 months of decline is less than a month. This rally seems to be based more on FOMO rather than a strong fundamental driver. We can expect the buyers to start taking some profits off the table around these levels which could finally offer a decent pullback.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is diverging with the MACD which is generally a sing of weakening momentum often followed by pullbacks or reversals. In this case, it might be a hint that we could indeed see at least a pullback very soon.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the divergence with the MACD which has been going on since the breakout of the key trendline around the 13700 level. The buyers should keep leaning on the lower bound of the rising channel where they have also the red 21 moving average for confluence. The sellers, on the other hand, will want to see the price breaking lower to target a drop into the 14000 level and upon a further break, the support around the 13700 level.
