Nasdaq rebounds as oil prices ease and Trump suggests the war could end soon. What’s next?

FUNDAMENTAL
OVERVIEW

The Nasdaq nearly tested
its November low yesterday as markets kicked off the week in a strong risk-off
mood. Sentiment improved later in the day as oil prices fell sharply following
the G7’s
indication that it may release emergency oil reserves.

In the evening, Trump
told CBS that the war could be over soon, triggering a quick relief rally
as traders began to look ahead to a possible de-escalation. We haven’t seen a
definitive signal yet as Trump noted that the war is unlikely to end this week.
Still, downside risks now appear more limited.

Traders will likely start
looking for dip-buying opportunities as negative growth expectations continue
to be repriced. Once the US or Israel announce that they’ve achieved their
objectives or that the nuclear threat is no longer a concern, we should see a
strong and sustained rally, with a high chance of new all-time highs after such
a long period of consolidation.

NASDAQ TECHNICAL
ANALYSIS – DAILY TIMEFRAME

On
the daily chart, we can see the
Nasdaq nearly tested the November low
yesterday before rebounding strongly. There’s not much we can glean from this
timeframe, so we need to zoom in to see some more details.

NASDAQ TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME

On
the 4 hour chart, can see the
price is trading in a range between the 24,173 support and the 25,466
resistance. If the rally extends further, we can expect the sellers to step in around
the resistance with a defined risk above it to position for a drop back into
the support. The buyers, on the other hand, will look for a breakout to
increase the bullish bets into a new all-time high.

NASDAQ TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME

On the 1 hour chart, we have
an upward trendline defining the bullish momentum on this timeframe. The buyers
will likely continue to lean on the trendline with a defined risk below it to
keep pushing into new highs, while the sellers will look for a break to pile in
for a drop back into the support next. The red lines define average daily range for today.

UPCOMING CATALYSTS

Tomorrow we have the US CPI report. On Thursday, we get the latest US Jobless
Claims figures. On Friday, we conclude the week with the US PCE price index,
the University of Michigan Consumer Sentiment survey and the Job Openings data.
As a reminder, the market focus right now is solely on the US-Iran war, so the
data might not matter much.