Yesterday was another day of choppiness for the Nasdaq Composite with an initial spike higher following less hawkish comments from Fed’s Waller where he said that there were good arguments that if inflation continued falling for several more months they could lower the policy rate. The gains got erased soon after though as the labour market details in the US Consumer Confidence report could have been the reason for caution, especially since we are approaching some key economic releases before the FOMC rate decision on the 13th of December.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite continues to consolidate maintaining a bullish tilt into the cycle high at 14446. We might start to see some profit taking around these levels which could finally provide a decent pullback. We can also expect the sellers to step in around these levels with a defined risk above the cycle high to position for new lows.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD recently which is generally a sign 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 soon. From a risk to reward perspective, the buyers would have a much better setup around the 13700 support where we can also find the confluence with the 38.2% Fibonacci retracement level of the entire rally.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price has been diverging with the MACD since the breakout of the key trendline around the 13700 level. The price recently broke below the lower bound of the rising channel which increases the odds of a pullback, although one last spike into the cycle high cannot be ruled out. The sellers are likely to start piling in targeting first the swing low at 14000 and upon a further break lower, look for the support at 13700. The buyers, on the other hand, should use those support levels to position for a resumption of the uptrend.
Upcoming Events
Tomorrow we will get the US PCE and US Jobless Claims data with the market likely focusing more on the latter given that we already saw the latest inflation data with the US CPI report just two weeks ago. On Friday, we conclude the week with the US ISM Manufacturing PMI which missed expectations by a big margin the last time.
