Nasdaq Technical Analysis – Time to rally to all-time high?

Basic overview

The Nasdaq rallied to recent highs last Friday despite better-than-expected US CPI and PPI reports. However, the Fed is targeting PCE and core PCE Y/Y is now expected to fall to 2.6%.

The market has now priced in the aggressive rate cut expectations and is almost perfectly in line with the Fed’s forecasts. Therefore, in a resilient economy, we will continue to see interest rate cuts, which is a positive driver for the stock market.

As a reminder, the Fed’s response function has changed, so stronger data will at best lead to a pause in the easing cycle. They no longer even think about tightening things up. The next big risk event for the market will be the US election in November.

Nasdaq Technical Analysis – Daily Timeframe

On the daily chart we can see that the Nasdaq is now back to recent highs around the 2530 level. Here we can expect the sellers to intervene with a defined risk above the high to position for a decline back to the 19818 level. Buyers, on the other hand, want the price to break higher to extend their bullish bets to the all-time high.

Nasdaq Technical Analysis – 4 Hour Timeframe

On the 4-hour chart we can see the recent price action more clearly, with higher lows reaching the 20530 level. There is not much we can learn from this time frame as sellers are waiting for a rejection of the high while buyers want to see a breakout to reach new highs.

Nasdaq Technical Analysis – 1 Hour Timeframe

On the 1-hour chart, we can see that the market has consolidated between the resistance at 2500 and the support at 2330. Buyers will look for an upside breakout to set new highs, while sellers will look for a price pullback to target a decline to the 19800 level. The red lines define the average daily range for today.

Upcoming catalysts

This week is pretty empty on the data front, with only a few major economic releases. Today, Waller speaks from the Fed as we get US retail sales and US jobless claims data on Thursday.