Nasdaq Technical Analysis – The market gets a boost from soft inflation data


We had some good news last week when both the CPI
and the PPI
came in on the soft side. This should help the stock market in the bigger picture
since it will give the Fed more confidence to begin decreasing rates in the
latter part of the year.

The FOMC decision last week was slightly more
than expected, but Fed
Chair Powell
made it clear that their estimates are subject to change as
they are still very data dependent, so the market looked past the Fed’s

The risk sentiment remains a bit murky, but it appears that the negative
mood of the prior week is dissipating. We have US Retail Sales data today, and
good data should bolster the market and improve the risk sentiment.

Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq keeps making all-time highs as the path of least resistance
remains to the upside. From a risk management perspective, the buyers will have
a better risk to reward setup around the trendline where they will also find the confluence of the 61.8% Fibonacci retracement level. At the moment though, it’s
unlikely that we will see such a big pullback unless we get some really ugly US

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a good support zone around the 19800 level where we can find
the confluence of a minor trendline and the 38.2% Fibonacci retracement level.
If the price gets there, we can expect the buyers to lean on the trendline with
a defined risk below it to position for another rally with a better risk to
reward setup. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into the 19000 level next.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have the lower bound of the average daily range for today right around the recent
resistance now turned support. If we get a dip into it on weak US Retail Sales
data, the buyers might step in around there to fade the reaction and position
for new highs.

Upcoming Catalysts

Today we have the US Retail Sales and US Industrial Production. On Thursday,
we get the US Housing Starts, Building Permits data and the latest US Jobless
Claims figures. On Friday, we conclude the week with the and US PMIs.

This article was written by Giuseppe Dellamotta at Source