Nasdaq Technical Evaluation – Only a pullback or the beginning of an even bigger correction?

Basic Overview

The Nasdaq rallied right into a
new all-time excessive following Trump’s victory and the purple sweep because the market
began to look ahead to bullish drivers like tax cuts and deregulation.

The one bearish purpose
individuals had been taking a look at was the rise in Treasury yields. That’s typically
bearish solely when the Fed is tightening coverage not when yields rise on constructive
development expectations.

Proper now, the Fed’s
response perform is sturdy economic system would warrant an earlier pause in
the easing cycle and never a tightening. That ought to nonetheless be supportive for the
inventory market.

If the Fed’s response
perform modifications to a possible tightening, then that may seemingly set off a giant
correction within the inventory market on anticipated financial slowdown.

For now, the present
pullback appears to be like as one thing wholesome given the very sturdy rally following
Trump’s victory, so the dip-buyers ought to be joyful about it.

Nasdaq
Technical Evaluation – Each day Timeframe

On the every day chart, we are able to
see that the Nasdaq pulled again to a key swing excessive degree at 20790. That is
the place we are able to count on the consumers to step in with an outlined threat beneath the extent
to place for a rally into a brand new all-time excessive. The sellers, on the opposite
hand, will wish to see the value breaking decrease to extend the bearish bets
into the foremost trendline.

Nasdaq Technical
Evaluation – four hour Timeframe

On the four hour chart, we are able to
see that we’ve additionally the 38.2% Fibonacci retracement degree standing proper across the
swing excessive degree. This could technically strengthen the assist degree and provides
the consumers a pleasant degree the place to lean onto and defend their stops. The
sellers, however, will search for a break decrease to increase the pullback
into the trendline.

Nasdaq Technical Evaluation – 1 hour Timeframe

On the 1 hour chart, we are able to
see that we’ve a minor downward trendline defining the present pullback. The
sellers will seemingly carry on leaning on it to place for brand new lows, whereas the
consumers will search for a break greater to extend the bullish bets into a brand new
all-time excessive. The purple traces outline the common every day vary for at this time.

Upcoming Catalysts

As we speak we conclude the week with the US Retail Gross sales report.

This text was written by Giuseppe Dellamotta at www.ubaidahsan.com.



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