Nasdaq Composite: A few one-off cheap buyouts

(News Bulletin 247) – On cheap purchases, the Nasdaq Composite index ends a complicated week positively, without the bottom matrix changing, namely the fear of an entry of the American economy into recession in the current of the year 2023. The flagship index of technology stocks on the American side gained Thursday 1.62% to 11,232 points. It is worth taking a step back by recalling that since the beginning of the year, the reflux has been more than 28%…

The index, with high beta, is particularly sensitive to repeated tightening of the screws in major central banks. The latter “can no longer, as before, come to the rescue and restart the machine in the event of a crisis given the inflationary forces at work (repatriation of production chains, energy transition, changes in the structure of savings) “, as CARMIGNAC’s strategists remind us. “This is a real source of concern because many bubbles have formed in the wake of the support measures taken for several years around the world. However, historically, rate hikes have almost always led to the bursting of bubbles speculation and/or market crises.”

Timidly, US Treasury bond yields appear to have eased recently, suggesting that the Fed has regained credibility – it would still have taken Jerome Powell to state his “unconditional” determination to fight inflation, mentioning that if this was not the objective, it was possible that the rise in rates would lead to or precipitate a recession…

The Treasuries 10-year bonds momentarily stabilized at around 3.10%.

In terms of statistics, investors will carefully follow the US consumer confidence index (U-Mich index for University of Michigan) at 4:00 p.m., in revised data. They learned yesterday of weekly registrations for unemployment benefits perfectly in line with expectations.

KEY GRAPHIC ELEMENTS

The working matrix remains unchanged, bearish in spite of the moreover timid reaction yesterday with regard to the initial ebb.

The narrow trading range that we identified between 13,330 and 13,838 points was broken under conditions of volumes, volatility, and very significant candles. The marubozu plotted on Thursday 04/21 shows in particular a mobilization of the selling side throughout the session, until a close almost exactly on the low points, opening the way to a bearish target CT at 12,640 points. The latter was broken, after a hesitantly nervous hesitation on the second part of week 17.

Friday’s closing level off the weekly lows, which we put on watch, brings an additional bearish reading. The very clear price / volume divergence has been unappealing since May 25, was followed by a release of selling energy out of the bottom of a micro-diamond, followed by the formation of two large bearish gaps, the last of which was only partially regained on Wednesday 15.

A fragile oblique railing is put under very close surveillance. We have represented it in black and dotted on the graph below. It frailly supports a pattern chartist, and constitutes its oblique neck line.

Neutral opinion across the upcoming session.

FORECAST

In view of the key chart factors that we have identified, our opinion is neutral on the Nasdaq Composite index in the short term.

We will take care to note that a crossing of 11569.00 points would revive the tension in the purchase. While a break of 10200.00 points would relaunch the selling pressure.

CHART IN DAILY DATA

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