Yesterday, the Nasdaq Composite stalled at the highs following the strong rally after the University of Michigan Consumer Sentiment report. Overall, the sentiment in the market is very bullish as the goldilocks economic data continues to support the upside. The only risk now is that the Fed becomes more worried about the strength and delays the rate cuts until there’s some clear weakness in economic activity. That could weigh on stocks in the short term if Treasury yields start to rise meaningfully.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite stalled at the highs as depicted by the spinning top candlestick. The price got a bit overstretched as we can see by the distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers will have a much better risk to reward setup around the trendline where we can also find the 61.8% Fibonacci retracement level and the red 21 moving average. Alternatively, there’s also the previous high around the 15150 level that could act as support with the blue 8 moving average for confluence.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the two bullish setups around the 15150 high and the trendline. The buyers might want to split their positions as the price can bounce from either level. The sellers, on the other hand, will want to see the price breaking below the trendline to invalidate the bullish setup and start targeting new lows.
Upcoming Events
This week is a bit more tranquil on the data front with the major releases scheduled for the final part of the week. We begin tomorrow with the US PMIs while on Thursday we will see the Advance US Q4 GDP and the latest US Jobless Claims figures. Finally, on Friday we conclude the week with the US PCE report.
