Yesterday, the Nasdaq Composite opened higher as we got some risk on sentiment following the news of de-escalation between Iran and Israel after the Iran retaliation. The market came under pressure at the open as the US Retail Sales beat expectations by a big margin with positive revisions to the prior figures. The data continues to run hot and therefore push backword rate cuts expectations. In the second half of the trading session, we got news of Israel intending to retaliate shortly triggering another wave of risk off flows which led to some key technical breaks exacerbating the selloff.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite sold off into the first key support level at 15929 following the hot US Retail Sales and the geopolitical news. This is where we can expect the buyers to step in with a defined risk below the level to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the next support at 15453.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price broke out of the 3-week long range and triggered more bearish momentum as the sellers piled in more aggressively to target a break below the 15929 support. After the breakout of the rising wedge, the market started to rollover from the highs and the chances of seeing a correction all the way down to the base of the pattern at 14477 increase by the day.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we now have a trendline defining the current downward momentum where we can find the confluence of the 38.2% Fibonacci retracement level and the blue 8 moving average. This is where we can expect the sellers to step in with a defined risk above the trendline to position for new lows. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into a new all-time high.
Upcoming Events
This week is a bit empty on the data front with just one notable report left on Thursday as we get the latest US Jobless Claims figures. Watch out also for hawkish signals from Fed speakers throughout the week and Fed Chair Powell today.
