Nasdaq Composite: Bullish chart rejection at 13,330 points

(News Bulletin 247) – Technical rebound in perspective this Wednesday on the Nasdaq Composite index, the main equity indices across the Atlantic following in the footsteps of their European colleagues. It should be noted that below 13,330 points, the technical situation remains very delicate. On the sanctions front against the Russian economy, President Biden ordered an embargo on imports of Russian oil into the United States, propelling WTI (light Texas crude) above $125 a barrel…

On the statistical side, we will follow the new job offers (JOLTS) at 4:00 p.m. on Wednesday, a new measure of the degree of tension in the job market, to which the Fed is particularly attentive as a leading indicator of inflation. Operators will also monitor crude inventory levels at 4:00 p.m. Disappointment to report yesterday on the deficit (structural but below expectations) of the US trade balance for the month of January.

The backdrop remains unchanged. The conflict in Ukraine and its potential impacts on global growth and near-term energy prices, and the turmoil in the Fed’s monetary policy construction are putting pressure, especially in this new context of open power-to-power talks Westerners on a possible boycott of Russian oil.

Compared to Europe, which is more exposed in particular with regard to its dependence on Russian natural gas, César Perez Ruiz, Head of Investments and CIO at Pictet Wealth Management notes that “the American economy is relatively spared by the war and [que] the jobs report for February was quite positive. Despite a low unemployment rate, US wage growth remained subdued last month. It nevertheless remains up by 5.1% over the year as a whole and therefore deserves to be closely monitored. Fed Chairman Jerome Powell has maintained his tough rhetoric when it comes to fighting inflation.”

Under these conditions, instead of a 50 basis point hike in the Fed Funds on March 16, we can expect a 25 bp hike, i.e. the beginning of the monetary turn, in a simply less tight angle .

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 whole 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. Positive opinion across the upcoming session.

FORECAST

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

This bullish scenario is valid as long as the Nasdaq Composite index quotes above the support at 12640.00 points.

CHART IN DAILY DATA

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