(News Bulletin 247) – The Nasdaq Composite index, the flagship index of technology stocks on the American side, whose Growth bias is very marked, gained 3.77% to 123,436 points on Wednesday, investors judging the attitude of the US central bank. The Fed completed a FOMC (Monetary Policy Committee) yesterday which unsurprisingly resulted in a 25 basis point increase in Fed Funds. Either the beginning, for the moment gently, of a monetary shift. The powerful monetary institution headed by J. Powell has hinted that there will be a hike at each FOMC between now and the end of the year, in order to fight against inflation that the conflict in Ukraine is exacerbating, particularly on the side crude.
The lack of progress towards a resolution of the conflict in Ukraine should however not allow a bullish extension on Thursday. The hope that the Russian and Ukrainian negotiators can find a way towards a possible resolution of the conflict comes up against the dramatic reality of the bombings in Ukraine. Jean-Yves Le Drian, the boss of the Quai d’Orsay accuses, in an interview granted to the Parisian, Russia of “pretending to negotiate” a ceasefire with Ukraine.
In terms of statistics, note that the Philly Fed, at 27.4, and weekly jobless claims, at 214,000 new units, both beat expectations. To follow at 2:15 p.m. the monthly federal report on industry (production and rate of use of productive capacities).
KEY GRAPHIC ELEMENTS
As a reminder, here are a number of key elements presented in our previous technical and graphical analyzes on the index: “Congestion is expected between 13,330 points and 14,445 points, i.e. a wide band where the nervousness of operators. In the event of an exit from the bottom, especially in thick volumes, the technical situation becomes problematic. Week 07 was in this respect with very high technical stakes. The weekly closing level, of importance, is practically on 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 the session on Thursday 02/24 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.
Divergence/price analysis has made sense since the start of the year.
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 13330.00 points.
CHART IN DAILY DATA
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