Nasdaq Consolidates After Historic Milestone
Market Overview
On Thursday, Nasdaq futures entered a period of consolidation following Wednesday’s historic breakout that saw the index surpass the 20,000-point mark for the first time. This remarkable milestone underscores the Nasdaq’s robust performance, with a year-to-date gain of nearly 33% in 2024. Investor optimism remains buoyed by expectations of a dovish pivot from the Federal Reserve, following inflation data that aligned with market forecasts. As traders digest these developments, focus shifts to upcoming producer price index (PPI) and retail sales figures, which could further clarify the outlook for U.S. monetary policy.
Technical Analysis
The Nasdaq futures have resumed their upward trajectory on the daily chart, breaking above the key resistance at 21,253.25. This move reinforces the strength of the ongoing bullish trend, placing the index on a direct path toward the next significant resistance at 21,829.63. Successfully overcoming this hurdle would pave the way for further gains, with 22,185.90 serving as the subsequent target. The ultimate upside target in this scenario is 22,572.02, which aligns with Fibonacci extensions and historical resistance zones.
Oscillators Confirmations
Momentum indicators corroborate this bullish sentiment. The Relative Strength Index (RSI) remains firmly in positive territory, signaling robust momentum without yet entering overbought conditions. Similarly, the Moving Average Convergence Divergence (MACD) indicator confirms the bullish trend, with both the MACD line and the signal line trending upward. Meanwhile, the alignment of the 50-day and 100-day moving averages further reinforces the long-term positive sentiment.
Alternative Scenario
However, failure to maintain momentum could expose the index to downside risks. A retreat below the support at 21,253.25 would signify a potential shift in sentiment, targeting the next support level at 20,896.98. A breach of this level could extend losses toward the November 15 low of 20,320.60, signaling a broader correction in the bullish trend.
Key Levels
- Resistance Levels: 21,829.63, 22,185.90, 22,572.02
- Support Levels: 21,253.25, 20,896.98, 20,320.60
Key Events to Watch
The market’s attention remains focused on U.S. inflation dynamics following consumer price data that matched forecasts. Anticipation of next week’s Federal Reserve meeting has intensified, with growing speculation of a rate cut. Later today, the release of producer price index (PPI) and retail sales data will provide additional insights into the health of the U.S. economy. These metrics are likely to shape market expectations for monetary policy, further influencing Nasdaq’s trajectory.
Conclusion
The Nasdaq maintains its bullish momentum, with 21,829.63 emerging as the next critical resistance. A successful breach could drive the index toward 22,185.90, while failure to sustain gains risks a pullback to 20,896.98 or lower.
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