TECHNICAL ANALYSIS
On the daily chart, the Nasdaq Composite recently surpassed a crucial trendline and breached resistance at the 13700 level last Friday. While this has attracted buyer interest, caution is advised as the rally lacks clear bullish catalysts, increasing the risk of a potential fakeout. Examining the 4-hour chart provides a closer look at the breakout above the key trendline. Sellers are likely to watch for a retrace below the trendline and the 13700 level to confirm a fakeout and prepare for a potential decline. Moving down to the 1-hour chart, divergence between the price and the MACD suggests weakening momentum, often preceding pullbacks or reversals. In the event of a pullback, buyers may find support at the upward trendline and the red 21 moving average for an opportunity to position for further upside. Conversely, a break below the upward trendline would confirm a reversal, with sellers regaining control.
FUNDAMENTAL ANALYSIS
The Nasdaq Composite closed the previous week on a positive trajectory, experiencing a robust rally. Notably, the University of Michigan consumer sentiment report significantly fell short of expectations. The accumulation of bearish indicators includes the recent hawkish sentiments expressed by Fed speakers and the softening labor market data, exemplified by substantial misses in the recent NFP report and an increase in Continuing Claims. Caution is advised for buyers in the upcoming period.
Disclaimer: FMI's research services provide general information. The Users should evaluate the relevance to their specific needs.
