The Nasdaq recovered all
the losses from last Thursday’s sharp selloff amid a dip-buying wave and reassessment
of AI-related risks.
Nevertheless, this recovery
looks increasingly like a “suckers’ rally” amid more hawkish Fed bets, higher
Treasury yields and a stronger US dollar.
Moreover, Trump stated
yesterday that the US doesn’t need a deal with Iran. This is another major negative
growth driver that could eventually put more pressure on the stock market.
Today, we get the US PPI report,
but the data is unlikely to change much since we’ve already got a major hawkish
repricing following Fed governor Waller’s remarks and the hot US CPI data.
Overall, the outlook for
the Nasdaq remains neutral to bearish. We would need an end to the Iran war or
a more dovish Fed to get a sustainable bull market.
NASDAQ TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On
the daily chart, we can see the Nasdaq (US100 CFD contract) is approaching a key resistance zone around the
28,800 level where we have also a major downward trendline for confluence. We
can expect the sellers to step in around the resistance, with a defined risk
above the trendline, to position for a drop back into the major upward trendline.
The buyers, on the other hand, will want to see the price breaking higher to increase
the bullish bets into new all-time highs.
NASDAQ TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On
the 4 hour chart, we have a
minor upward trendline defining the bullish momentum. If we get a pullback, we
can expect the buyers to lean on the trendline, with a defined risk below it,
to keep pushing into new highs. The sellers, on the other hand, will want to
see the price breaking lower to pile in for a drop into the major upward trendline,
targeting a breakout.
NASDAQ TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the sellers will look for short opportunities around
the resistance zone or on the break of the upward trendline, while the buyers
will look for a bounce around the minor upward trendline or a break above the
major downward one to position for new highs. The red lines define average daily range for today.
UPCOMING CATALYSTS
Todayconclude
the week with the US PPI data.
This article was written by Giuseppe Dellamotta at investinglive.com.