Fundamental
Overview
The Nasdaq posted its biggest daily decline since December 2022 yesterday
as the rotation out of big tech stocks into more rate sensitive names
continues. We can clearly see this internal market dynamic unfolding as the
Russell 2000 and the Dow keep on gaining.
In the big picture, the fundamentals did not change, on the contrary the
soft-landing narrative strengthened as we continue to see inflation falling
while the economy continues to grow. This week, we got more positive data with US Retail Sales and Industrial Production beating expectations by
a big margin.
It looks like the Fed is going to cut rates into a
resilient economy and that should be a strong bullish driver.
Nasdaq
Technical Analysis – Daily Timeframe
Nasdaq Daily
On the daily chart, we can
see that the Nasdaq had a pretty bad day yesterday posting the biggest daily
decline since 2022. The price broke through some key levels and extended the
move to the downside as the bearish momentum increased.
We now have another trendline around the 19700 level where we can
expect the dip-buyers to step back 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, will want to see the price breaking lower to increase the bearish bets
into the next major trendline around the 19000 level.
Nasdaq Technical
Analysis – 4 hour Timeframe
Nasdaq 4 hour
On the 4 hour chart, we can
see that we have a good resistance zone now around the 20300 level
where we can find the confluence of the trendline, the previous resistance now turned support and the Fibonacci retracement levels.
If we get a pullback into
the resistance, we can expect the sellers to step in to position for a drop
into the 19700 level with a better risk to reward setup. The buyers, on the
other hand, will want to see the price breaking above the resistance and the
downward trendline to regain some control and position for a rally into new
highs.
Nasdaq Technical
Analysis – 1 hour Timeframe
Nasdaq 1 hour
On the 1 hour chart, we can
see that the price is right in the middle of the key levels, so from a risk
management perspective, there’s not much to do here. More aggressive sellers
might pile in on a break below the yesterday’s low but the risk to reward setup
would be worse. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures.