Nasdaq Composite Technical Analysis

The Nasdaq Composite yesterday held all the gains
from last week as the economic calendar remains poor until the final part of
the week. The technicals are likely to lead the price action in the days ahead with
the attention turning to the US Jobless Claims data on Thursday as the market
will want to see how fast the labour market is weakening.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq Composite
yesterday retested the broken minor trendline as the
buyers continue to remain in control. The price is now overstretched as
depicted 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 a continuation.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
break and retest of the minor trendline. The buyers should be targeting the
major trendline where we can also find a key swing level at 13700. In case the
price gets there, the sellers are likely to step in more aggressively with a
defined risk above the trendline to position for a drop into new lows.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that in
case the price extends to the 13700 level, we will probably have a divergence with
the MACD. That
would be a sign of weakening momentum, which is often followed by pullbacks or
reversals. From a risk management perspective, the buyers would be better off
waiting for a pullback instead of chasing the rally at these stretched levels.
The sellers, on the other hand, will have a great risk to reward setup around
the 13700 resistance.


This week is pretty empty on the data front with just
the US Jobless Claims on Thursday and the University of Michigan Consumer
Sentiment on Friday. The market is likely to focus on the US Jobless Claims on
Thursday given the recent weakness in the labour market data.

This article was written by FL Contributors at

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