(News Bulletin 247) – The red should reappear this Friday on the technological side of the American quotation, the doubts remaining on the capacities of supply of components since the resurgence of cases of Covid in the region of Shenzen, and as the hope, cherished for a time this week, of a diplomatic solution to the conflict in Ukraine was dwindling. The lack of progress in negotiations between Ukraine and Russia, and on the contrary the harsher Western condemnations against Vladimir Putin, now openly accused of war crimes by the United States, are also forcing investors to temper the probably premature optimism shown on Wednesday in particular. Moreover, the American President did not hesitate to warn China that sanctions could be taken in the event of Xi Jinping’s support for Russia.
In the statistical chapter yesterday, the publications were concentrated on the American side. The Philly Fed at 27.4 and weekly jobless claims at 214,000 new units both beat expectations. RAS on the side of the federal monthly report on industry, close to the consensus both on the dynamics of the volume of production and on the rate of capacity utilization. To follow the sales of old homes in the United States as well as the index of leading indicators (Conference Board) at 3:00 p.m. Note that Wall Street will open for another week at 2:30 p.m. instead of 3:30 p.m., the time Paris switches to summer time in turn (next weekend).
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 14150.00 points.
CHART IN DAILY DATA
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