Sage Investment Club

Perhaps most importantly for the technical analysis for the Nasdaq Composite, the market reacted positively to
the beat in the NFP data and the miss in Average
Hourly Earnings and the ISM
Services PMI
. The Fed
Chair Powell
has not touched on monetary policy or recent set
of data and the CPI report came out as expected.

Overall, the market interpreted
the recent developments as good news with inflation moderating and the labour
market remaining strong
. The “soft landing” narrative is again in the
front seat and it’s driving the stock market to new highs.

The China reopening may also be a
contributor as the market may expect global growth to hold on in the
short-term, but it may also reignite inflationary pressures and make the Fed’s
job harder

For now, the market is looking
only to the good side of things, and it will probably need really bad data on
the growth side to change the sentiment.

On the daily chart above, the
price has breached to the upside the resistance zone in the 10900 price region.
The target for the bulls now would be the resistance in the 11500 price area. A
failure to sustain the bullish momentum and a fall below 10900 would give the
bears control again.

On the 1-hour chart above, we can
see that the price is indeed struggling sustaining the bullish momentum
as depicted by the rising
wedge pattern
and the price divergence with the RSI. This is ominous for the bulls
as the price is breaking out of the wedge and may fall below the 10900 level.

Zooming in to the 15 minutes
chart above, we can see that the bulls would need to break the 11143 level
and keep charging
to invalidate the wedge pattern and target the resistance
at 11500.

On the other hand, a break
below the 11027 level would give the bears more control and a further fall
below the 10900
support level should signal the resumption
of the bearish trend

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