Nasdaq Composite: Blushing of the technical and graphic framework

by

(News Bulletin 247) – The Nasdaq Composite index will have ended Friday (-2.72%) the week (-7.55%) on a bright red note, against a background of heating of 10-year Treasuries, measurable by yardstick the Fed’s tougher stance. The start of the quarterly (and annual) FANGAM ball, inaugurated by Netflix, will have weighed heavily. The subscription video-on-demand specialist saw its stock plummet by almost 25% over the whole of the past week, losses which accelerated after the publication of less than expected growth in the number subscribers. This famous rate of recruitment, which has not been able to convince a particularly greedy financial community on these levels of valuation. Result: a warning shot for all tech files, by nature hypersensitive to government bond yields.

The week is therefore going to be high risk, on the micro and macroeconomic fronts. First of all because the quarterly ball will intensify: Microsoft on Tuesday, Tesla and Intel on Wednesday and Apple on Thursday among other representative heavyweights… And also because the Fed ends a new meeting of the Monetary Policy Committee on Wednesday ( FOMC). However, no hike in federal rates is expected, and barring any surprises, the start of the tap tightening will not occur until March. Verdict at the end of the meeting on Wednesday. The press conference will be dissected there in its least inflections of elements of language.

To follow this Monday the PMI (Markit) in “flash” data for industry and services in the United States at 3:45 p.m. Tomorrow, a major date to tick off the agenda with the consumer confidence index (Conference Board).

KEY GRAPHIC ELEMENTS

Let’s stop for a moment on the combination of candles validated on Thursday, firmly campaigning for a continuation of the ebb: a so-called three-cord black structure. The three black ravens are sometimes called “three-winged raven”, a term that comes from a Japanese expression saying that “bad news has wings”. This combination portends prices to fall if they appear at market highs or during an uptrend. Visually, the 3 crows are 3 black candlesticks, combining the following 2 characteristics:

1) All 3 candlesticks close at or near their lows.
2) Each open must be inside the body of the previous candle.

The structure is therefore fully validated and the thick and constant volumes on the three candles highlight its direction, in a market worried about the rise in long-term government bond yields.

In the end, over the whole of the past week, and on sustained cumulative volumes, the index will have closed on its session lows four times. In weekly data, this is the third time that it has closed on (or almost on) its weekly lows.

The oblique line symbolizing the trend background has been broken, and after pullback on January 12, the index fell again on the 13th, with investors mobilizing throughout the session.

PREVISION

Considering the key chart factors we have mentioned, our opinion is negative on the Nasdaq Composite index in the short term.

This bearish scenario is valid as long as the Nasdaq Composite Index is trading below the resistance at 14445.00 points.

CHART IN DAILY DATA

Nasdaq Composite: Blushing of the technical and graphic framework (©ProRealTime.com)

©2022 News Bulletin 247

Source: Tradingsat

You May Also Like

Recommended for you

Immediate Peak