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The Nasdaq Composite began to breathe in prices on Friday (-0.35% to 12,123 points) at the end of a week marked by very encouraging signs on the inflation front. In particular, the consumer price index, at an annualized rate, fell from 6% to 5%, causing a feeling of relief in the trading rooms.

At the same time, indicators showing a slowdown in activity – and this is somewhere one of the objectives of the Fed in its monetary tightening policy – have multiplied. On Friday alone, retail sales completely missed their March target. Consumption is traditionally the main driver of growth across the Atlantic.

“Two forces will oppose each other on the markets in the second quarter, on the one hand a continuation of the slowdown in the pressure on prices, a preamble to less aggressive rhetoric from central banks later this year, which is rather likely to support the equity markets, and on the other hand signs of an economic slowdown which should be more numerous, in particular in the United States, which could curb the appetite for risky assets via less good corporate results. “, summarizes Alexandre Baradez (IG France).

The analyst recalls that “the ISM manufacturing index not only continues to evolve below 50 (contraction) for the fifth consecutive month but deteriorated further in March to fall to 46.3, its lowest level since May 2020 during the crisis. covid.”

In the immediate future, and if the time is also for relief in the banking sector, a legitimate phase of price breathing is envisaged.

KEY GRAPHIC ELEMENTS

This breathing phase is all the more possible since the doji star drawn on Friday followed two marubozus of opposite colors, at the very heart of a thin working band (range) between 11,900 points and the yearly highs around 12,270 points. Above, and subject to an increase in volumes and volatility, the upward path started on the double dip at the turn of the year is assured. Below, the filling of the bullish gap of March 29 is in the sights.

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 12270.00 points would revive the tension in the purchase. While a breakout of 11904.00 points would revive selling pressure.

The News Bulletin 247 board

Nasdaq Composite
Neutral
Resistance(s):
Medium(s):

CHART IN DAILY DATA



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