FUNDAMENTAL
OVERVIEW
The Nasdaq has been mostly rangebound this month as the US-Iran crisis
brought back inflation and growth risks. This has also happened amid
overcrowded tech positioning which has led to deleveraging across the board.
Last week’s soft US inflation data helped limiting the downside as the peak
inflation narrative got stronger and we got a dovish repricing in Fed interest
rates expectations, which reduced the Fed tightening risk. Nonetheless, the
situation in the Middle East is weighing on sentiment as there are good chances
of things getting worse before they get better.
The focus will stay on US-Iran headlines, especially this week with nothing
on the agenda. The upside in the Nasdaq will remain limited, and the bearish
pressure might even increase the longer the war drags on. It goes without
saying that a ceasefire would be positive for the stock market, while a
full-scale war would open the door for new lows.
NASDAQ TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On
the daily chart, we can see the Nasdaq recently bounced from the 28,800 support. The buyers will
likely continue to step in around the support to position for a rally back into
the 30,900 resistance. The sellers, on the other hand, will want to see the
price breaking lower to pile in for a drop into the 26,500 level next.
NASDAQ TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On
the 4 hour chart, we have a
downward trendline defining the bearish structure. If the price pulls back into
it, we can expect the sellers to step in with a defined risk above the
trendline to position for a break below the support. The buyers, on the other
hand, will want to see the price breaking higher to increase the bullish bets
into the resistance next.
NASDAQ TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor upward trendline defining the current pullback into the major
downward trendline. We can expect the buyers to continue to lean on the
trendline with a defined risk below it to keep pushing into new highs, while
the sellers will look for a break to pile in for a drop into new lows. The red
lines define average daily range for today.
UPCOMING CATALYSTS
Tomorrow, we get the latest
US Jobless Claims figures, while on Friday we conclude the week with the Flash
US PMIs. The focus remains on US-Iran headlines.
This article was written by Giuseppe Dellamotta at investinglive.com.