Nasdaq Composite Technical Analysis

December 5, 2023 11:34 am

Yesterday, the Nasdaq Composite opened lower but
recovered most of the losses ending the day basically flat. At the moment,
there’s some consolidation going on probably due to uncertainty around the
upcoming economic data. The market rallied strongly in November as the rate
cuts pricing became more and more aggressive, but this wave of euphoria might
reverse quickly if the data starts to point to a hard landing. This week might
be key for the Nasdaq Composite as we are not only at an important technical
level, but we are also going to see lots of US labour market data.

Nasdaq Composite Technical
Analysis – Daily Timeframe

Nasdaq Composite Daily

On the daily chart, we can see that the Nasdaq Composite
pulled back to the red 21 moving average where we
got a bounce yesterday. Looking at how things have been going recently, this
might even be ironically the “biggest” pullback we will see before another
rally. There will be important levels to watch out for on lower timeframes
which might or might not increase the chances for the rally.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

Nasdaq Composite 4 hour

On the 4 hour chart, we can see that the price has
been diverging with the
MACD into the
cycle high. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. We indeed got a pullback with the buyers already piling
in near the most recent swing low. This move lower though gave us an early
lower low with the moving averages crossing over.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

Nasdaq Composite 1 hour

On the 1 hour chart, we can see that we
got the drop into the support zone
around the 14050 level yesterday. The buyers immediately stepped in, and we
could see a rally back into the minor downward trendline where
we will likely find the sellers waiting to enter the market and target a break
below the 14050 level. A break below the support should trigger a selloff into
the next key support around the 13700 level where we will also find the 38.2% Fibonacci
retracement
level of this entire November rally.

Upcoming
Events

This week we will see lots of US labour
market data culminating with the NFP release on Friday. Today, we have the ISM
Services PMI and the US Job Openings reports. Tomorrow, we will get the US ADP
data. On Thursday, it will be the time for the US Jobless Claims figures, while
on Friday we conclude the week with the NFP report.

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