FUNDAMENTAL
OVERVIEW
The Nasdaq has been
consolidating since Monday as traders awaited the US NFP and CPI reports this
week. We got the NFP
yesterday and it was a hot one as it beat expectations by a big margin with the
unemployment rate falling further to 4.3% despite an increase in participation
rate.
The market reacted
positively even though we got a slightly hawkish repricing as traders pared
back the total easing seen by year-end from 60 bps to 53 bps after the release.
This is in line with the current regime of good news being good news as long as
inflation continues to slowly head towards target.
Tomorrow, we will have an
important test as we get the US CPI report. In case we get soft data, we will
likely see the stock market rallying into the all-time highs amid stabilising
labour market and easing inflation. On the other hand, a hot report will likely
trigger a stronger hawkish repricing and weigh on the market in the short-term.
NASDAQ TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On
the daily chart, we can see that
after the bounce near the October lows, the Nasdaq got stuck in a consolidation around the 25,400 level. The price is
trading right in the middle of the range, so there’s not much we can glean from
this timeframe and we need to zoom in to see some more details.
NASDAQ TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On
the 4 hour chart, we can see a
downward trendline defining the bearish momentum. The sellers will likely lean
on the trendline with a defined risk above it to position for a drop back into
the February lows. The buyers, on the other hand, will look for a break higher
to increase the bullish bets into new all-time highs.
NASDAQ TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can
see more clearly the rangebound price action just below the 25,400 level. The
buyers will likely pile in on the break of the trendline or on a retest of the 24,957
low to target new all-time highs. The sellers, on the other hand, will likely
step in around the trendline and increase the bearish bets on the break of the
24,957 low to position for a drop into the February lows. The red lines define
the average daily range for today.
UPCOMING CATALYSTS
Today we get the US Jobless Claims figures, while tomorrow we conclude the
week with the US CPI report.
This article was written by Giuseppe Dellamotta at investinglive.com.
