Nasdaq Short: Weak Tech & Key Data Ahead

Oct 31

Taking advantage of the current bearish momentum in the Nasdaq with a daily short setup. Recent price action reveals a double-top pattern and a significant trendline break, suggesting potential downside. As we approach critical economic data releases, volatility is expected, which could fuel further bearish movement.

Technical Analysis
• Pattern: Double-top formation, a bearish reversal signal, confirmed with a break below the neckline.
• Trendline: The long-standing upward trend has been broken, validating the bearish scenario.
• Key Resistance: $20,200 area is acting as a strong resistance zone.
• Support Levels: Initial support around $18,800 with further downside potential if broken.

Fundamentals:

The short position on Nasdaq is driven by the weak tech performance, with giants like MSFT (-6.05%) and META (-4.09%) showing declines. Rising bond yields have intensified pressure on tech stocks, indicating potential shifts in investor sentiment. Additionally, tomorrow’s key data—Non-Farm Payrolls (forecast: 113K vs. prior 254K), Unemployment Rate (expected steady at 4.1%), and ISM Manufacturing PMI (forecast: 47.6)—could further impact market outlook, with any surprises likely to influence Fed expectations and Nasdaq sentiment.

Risk Management

• Entry: Near current levels, aiming for downside momentum.
• Stop Loss: Above recent highs to protect against false breakouts.
• Target: Initial target at $18,800, with potential to extend if bearish momentum persists.
Risk Note: Given the volatility associated with these macroeconomic events, there is potential for increased fluctuations. Managing risk through stop-losses and close monitoring of data releases is essential.

Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.

Nov 3

Trade active

The NASDAQ remains in a challenging environment, with less than 50% of stocks above their 200-day moving average, indicating weak participation. Typically, when the index is far from its 200-day line during such sentiment, it suggests potential for a pullback or correction. Adding to the anticipation, high market volatility is expected from November 4th to 7th. I’ll be monitoring closely, aiming for a decisive outcome on this trade by week’s end.

Nov 5

Trade active

The trade is currently ranging between 19,877 and 20,173, staying below the Fib cloud with no key levels broken so far. With a high-impact news week ahead, exercise caution on future trades. Remember to secure profits and pay yourself!

Nov 10

Trade closed manually

Currently, the trade is in drawdown. I closed 90% of my position around the 20.212 price area due to the recent election-driven price surge, leaving a small position open to monitor any further movement. This week has been marked by a euphoric market rally. Hope you had an engaging and profitable week as well! Always remember to pay yourself when in profit—nothing is guaranteed in trading!

Nov 16

Note

Following a turbulent assimilation of a high volume of orders, the market has rebounded, pushing the price back to 20.4, bringing the position back into profit. If the market revisits 19,800, I will closely monitor the trade and consider closing it while still in profit. The current market behavior suggests that volatility remains, making it crucial to stay adaptable and ready to react. Always pay yourself when in profit. Nothing is guaranteed in trading, so secure your wins when the opportunity arises!