Yesterday, the Nasdaq Composite rallied into new highs as the market continues to trade into the CPI release today probably expecting good inflation figures. This raises the risk of a bigger selloff in case the data surprises to the upside given that we should also see Treasury yields rising and the aggressive rate cuts expectations getting trimmed. At the same time, we will see the latest Jobless Claims figures and that will also be something to factor in as strong numbers might double down on a hot CPI report. The best-case scenario for the market is probably benign inflation data and not too weak Jobless Claims.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite extended the gains yesterday as the buyers are eyeing a new high. There’s no clear level where to lean onto but we can expect the sellers to step in around the highs and probably double down if the US CPI surprises to the upside.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price yesterday breached the resistance zone around the 14860 level where we had the confluence with the red 21 moving average and the 61.8% Fibonacci retracement level. The buyers positioned for a rally into a new high, but the data today is a big risk for the trade.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor trendline that is defining the current uptrend. If the price were to break lower, we can expect the sellers to pile in to position for a drop into the 14780 support and upon a further break lower, into the 14050 level. The buyers, on the other hand, will likely step in around the support zone to position into new highs with a better risk to reward setup.
