Last week, the Nasdaq Composite managed to hold into the gains from the prior week given another slate of goldilocks economic data with a pickup in the PMIs, a much better than expected GDP report and the Core PCE indicating that the inflation rate over the last 3 and 6 months data fell below the Fed’s 2% target. This week contains many risk events so we might see the market trading a bit on the defensive side, but barring any negative surprises, we will likely continue to see new higher highs.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite consolidated around the highs. From a risk management perspective, the buyers will have a much better risk to reward setup at the trendline where we can also find the confluence with the previous high, the 38.2% Fibonacci retracement level and the red 21 moving average.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the bullish setup around the previous high at the 15150 level. If the price were to break below the trendline, then we can expect the sellers to extend the drop into the 14477 level next. The divergence with the MACD, which is generally a sign of weakening momentum, suggests that a pullback into the 15150 level is very likely.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the market bouncing on the most recent swing high. The buyers keep leaning on this support zone to position for another rally, but if the price were to break lower, then we can expect the sellers to pile in to target a drop into the 15150 zone.
Upcoming Events
This week is going to be a really busy one with the FOMC rate decision and lots of economic data on the agenda. We begin tomorrow with the US Job Openings and the US Consumer Confidence reports. On Wednesday we will see the US Employment Cost Index and the ADP data before the FOMC rate decision later in the day. On Thursday, we get the latest US Jobless Claims figures and the ISM Manufacturing PMI. Finally, on Friday, we conclude the week with the US NFP report.
