Yesterday, the Nasdaq Composite opened lower with probably some profit taking going on ahead of key risk events in the next few days. The selloff extended following the miss in the US ISM Services PMI although most of the losses were reversed into the close. The market might not overreact to one single bad data point and fade the moves to continue higher, but it makes it harder for buyers to keep the conviction.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday fell below the key trendline and bounced on the red 21 moving average as the dip-buyers piled in into the close. This break comes after a failed rally above the all-time high and weak US data, so it makes it more compelling, especially because there’s no Nvidia earnings to save the day now.
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 the price action formed a rising wedge, so this breakout opened the door for a fall all the way down to the 14477 level. The sellers will likely pile in to target the 15454 level first, but ultimately eye the base of the wedge at 14477.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the market opened lower yesterday and extended the drop after the miss in the ISM Services PMI. The sellers will now look to sell at the current resistance zone around the 15950 level and, in case we get a bigger pullback, the 16100 level near the all-time high.
Upcoming Events
Today we have the US ADP, the US Job Openings and the Fed Chair Powell speaking. Tomorrow, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US NFP report.
