The Nasdaq Composite shrugs off the risk of higher interest rates as strong US economic data coupled with slow disinflation gives the market soft landing vibes. Even Fed Chairman Powell’s hawkish comments pointing to possibly more than two rate hikes failed to lower the Nasdaq Composite. As long as the US data does not point to a recession, we may continue to see bought declines. This trading week is cut short as the market closes early today and will remain closed tomorrow for US Independence Day.
Technical Analysis of the Nasdaq Composite – Daily Time Frame
On the daily chart, we can see that the Nasdaq Composite found strong buyers leaning on the red on the 21st moving average and avoided a deeper decline to 38.2% Fibonacci retracement level and support at 13174. The price is now close to the previous high of 13862 and buyers will need to break it to extend the rally towards the next resistance at 14649.
Nasdaq Composite Technical Analysis – 4 Hour Time Frame
On the 4-hour chart, we can see that the moving averages have turned up again as bullish momentum has prevailed and buyers are now in control. Here, sellers can re-attempt a downside move position with defined risk above the high and first target 13174 support and then break below. Buyers will need to break to the upside if they want to sustain the momentum.
Nasdaq Composite Technical Analysis – 1 Hour Time Frame
On the 1 hour chart we can see that we have a good bullish setup for buyers in case there is a pullback. In fact, we can find a trend lineprevious resistance turned support at 13628, the 61.8% Fibonacci retracement level and the red moving average of 21. This spot has many technical confluences, so buyers are likely to enter here with defined risk below the trendline and target a breakout of the high. Sellers, on the other hand, will want to see the price break below the trendline to rally and target a move towards the 13174 support.
This week we’ll see some key economic data starting with the ISM Manufacturing PMI today, US Jobless Claims and ISM Services PMI on Thursday and the main event of the week: the US NFP report on Friday.