(News Bulletin 247) – Red dominates. After losing 1.56% to 13,537 points yesterday, the Nasdaq Composite index, the flagship index of technology stocks on the American side, is expected to fall by nearly 1% this Friday at the opening, against a backdrop of Putin’s stubbornness to invade Ukrainian territory. The attack on the country’s main nuclear power plant will have shocked the international community, even if the reactors themselves were not affected.
“While the global economy was supposed to rebound sustainably in 2022 with the inflection of the epidemic dynamics confirmed for a few weeks, the war in Ukraine appears day after day as a serious threat to this post-Covid recovery scenario”, summarizes Raouf. Boucekkine, teacher-researcher in finance at Rennes School of Business “In addition to the direct impact on world commodity market prices, already under pressure before the war, the concert of economic and financial sanctions imposed on Russia risks ‘add other vicious mechanisms capable of undermining even more deeply the world economy, and perhaps even disaggregating it into several economic-(geo)political areas with a reduced level of cooperation.
The big disappointment on the publication of the PMI Services (ISM data) yesterday, completely off target for the month of February, also weighed on the eve of the long-awaited federal report on employment, NFP report for Non Farm Payrolls). This report has just been published and highlights job creations much higher than expected (+678,000 in the non-agricultural private sector) as well as an even stronger contraction than expected in the unemployment rate, to 3. 8% of the working population.
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. However, 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, after a short phase of perilous rebalancing, in divergent volumes, the scenario of a resumption of the decline below 13,330 takes place. .
FORECAST
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 14150.00 points.
CHART IN DAILY DATA
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