After weeks of steady outperformance from tech compared to other sectors, the latest dip could be simple profit-taking—but in the bigger picture, it looks like flows are shifting as the appetite for risk begins to cool.
Markets are still waiting to learn more from the post Trump-Putin meeting developments, with EU leaders showing up to the White House today to discuss on the future path of action for the Ukraine-Russia ongoing war.
Participants will look to learn more on this before showing more appetite to risk. There is also key data appearing this week with PMIs from all around the globe.
Earnings season adds another layer of focus, with consumer giants like Walmart, Target, and Home Depot reporting this week and offering a read on household demand.
Meanwhile, the most recent PPI data has already begun to weigh on sentiment.
Let’s look at the charts to see if this cautious tone starts building into something larger.
The Nasdaq is showing consecutive doji candles at the higher bound of the May upwards Channel.
Bulls will have to be cautious particularly as a Daily Bearish divergence on the RSI is showing up after months of relentless rallying.
With momentum and sentiment appearing to shift, it will be essential to approach markets with a bit more caution, particularly with the PPI showing tariff-led inflation making its way to the US.
The September rate cut is still not out of the picture and a new ATH has just been formed, showing that markets are still far from bearish
Momentum is still around neutral and the 4H MA 50 is showing as immediate support (23,650).
Keeping this one in check is essential for bull/bear momentum analysis as we are nearing the mid-line of the longer-trend upward channel.
Any bearish continuation may point towards the 4H MA 200 which coincides with the lower bound of the channel (around 23,200).
Levels to watch for the Nasdaq:
Resistance Levels
- Top of Ascending Channel and Daily resistance 24,000 to 24,100
- Daily highs and ATH 23,986
- Friday highs 23,880
Support Levels
- 23,700 current Pivot Zone at the NFP highs (confluence with 1H and 4H MA 50)
- 23,500 Support
- 23,150 Main
