Nasdaq Composite Technical Analysis

Yesterday, the Nasdaq Composite opened the day
higher and after a brief rally the price reversed completely following the
strong US ISM Manufacturing PMI report.
The US Dollar and Treasury yields rose to the highest levels this year putting
some downward pressure on the stock market. Inflation is gradually becoming
again the threat for further gains and the expectations for rate cuts continue
to dwindle with the market now seeing basically a 50% chance of a cut in June.
The Fed might also change its tone to a more hawkish stance.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite 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 continue to trade inside the rising wedge, and
it’s worth to keep an eye on it because if the price were to break below the trendline, the
sellers will have much more conviction to look for new lows with the base of
the wedge at 14477 being the ultimate target.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the
price is consolidating near the bottom trendline where we have the red 21 moving average for confluence. The
buyers keep on stepping in with a defined risk below the trendline to position
for a rally into a new all-time high. The sellers, on the other hand, are
waiting for the price to break below the trendline to increase the bearish bets
and target new lows.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
gains have been capped by the counter-trendline and even if we got a brief
spike to the upside yesterday, the price fell back below the counter-trendline.
The buyers will likely pile in if we get a break to the upside and increase the
bullish bets in case we get a break above the 16480 level.


Today we have the US Job Openings and tomorrow the
US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless
Claims figures while on Friday we conclude the US NFP report.

This article was written by FL Contributors at

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