Last Friday, the Nasdaq Composite finally set a new all-time high despite a much weaker than expected ISM Manufacturing PMI. The market probably took it as good news because it reduces the chances of the Fed eventually being forced to resume tightening. In fact, the US Dollar and the Treasury yields fell across the board giving the stock market a boost. The path of least resistance remains to the upside until we start to see a deterioration in growth or the labour market cracks.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite extended the rally into a new all-time high last Friday. The buyers might start to pile in even more aggressively now but from a risk management perspective, the longs from the trendline looks better. The sellers, on the other hand, can only wait for the price to break below the trendline before considering short positions and target 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 for a long time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. We can also notice that we might have formed a rising wedge, so it will be important for the buyers to avoid a break below the bottom trendline because it could trigger a selloff into the base of the wedge at 14477.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have now a resistance turned support around the 16130 level where we have also the red 21 moving average for confluence. This is where the buyers are likely to step in in case of a pullback to position for another rally into new highs.
Upcoming Events
This week we have lots of important events on the agenda with the release of the US labour market data and the Fed Chair Powell testifying to Congress. We begin tomorrow with the US ISM Services PMI. On Wednesday, we have the US ADP, the US Job Openings and the Fed Chair Powell speaking. On Thursday, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US NFP report.
