(News Bulletin 247) – The Nasdaq Composite index sticks its head out of the water (+1.62% to 13,752 points), helped by the reassuring words of J. Powell yesterday before the Parliamentarians. The index, which should open in positive territory on Thursday, remains close to the technical danger zone of 13,330 points, on day 8 of the war in Ukraine.
“The most tangible and immediate risk is, […], that of a flare-up in gas and oil prices, as well as Ukrainian wheat. In an inflationary context that is already tense in the short term, this rise in raw materials will plunge central banks into a cruel dilemma”, observes Emmanuel Auboyneau, Managing Partner Amplegest. “Should they accelerate their monetary normalization movement, at the risk of weighing on the growth, or should they on the contrary wait until the resolution of this crisis? We expect the US Federal Reserve to follow through on its initial program of gradual rate hikes with an initial 25 basis point hike in March.”
This second part of the week, on the macroeconomic level, is placed under the sign of employment. Before learning the results of the NFP report (private employment, federal data) tomorrow, operators learned yesterday of the results of the survey of the private firm ADP (Automatic Data Processing), which show job creations in the private sector (excluding agriculture) of around 475,000, well above the target. A few minutes ago, registrations for unemployment benefits for the past week were published, contracting to 215,000 new registrations. To follow at 4:00 p.m. the ISM Services index, and the continuation of the half-yearly hearing of J. Powell before the American Parliamentarians.
KEY GRAPHIC ELEMENTS
As a reminder, here are a number of key elements presented last Wednesday: “Congestion is expected between 13,330 points and 14,445 points, i.e. a wide band where operators’ nervousness can be expressed. In the event of an exit by At the bottom, especially in thick volumes, the technical situation becomes problematic. As such, week 07 was very technically challenging. The weekly closing level, which is important, is practically at the lows of the week.”
In the light of the strength of the breach of this threshold, the 13,330 points are swung into major resistance, even if the index came to end Thursday’s session above it. The technical conditions of the breakout are indeed eloquent: bearish engulfing lined with a school black marubozu. The sales mobilization will have lasted the entire session.
The buying mobilization throughout Thursday’s session is impressive and further validates the entry into a phase of high volatility. We remain negative below 13,330 points for the time being. After a short phase of rebalancing forces, where volumes will be put under close watch, the formation of a next bearish leg is envisaged. In the immediate future, a short phase of perilous rebalancing takes place.
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 14150.00 points would revive the tension in the purchase. While a break of 12640.00 points would relaunch the selling pressure.
CHART IN DAILY DATA
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