Buyers Attempt to Regain Control
Nasdaq was able to regain much of it's losses during last Friday's trading session in attempt to invalidate the lower low bears put in at the beginning of the week (blue dotted line). The higher low pivot from October 4th, 2021 is at 14,367.75 and this weeks close was slightly higher at 14430.25.
The hourly chart shows that Nasdaq is currently in a trading range as bulls attempt to regain control of the trend. Another positive development for the bulls is that they were able to break out of the downward sloping parallel channel, although only slightly there as well.
The weekly chart (not pictured) closed with a doji with the majority of the exhaustion below the open for the week.
This week, bulls need to hope for a strong open to further invalidate the lower low bears put in and to perhaps form a dragonfly doji pattern signaling a potential bottom. If bulls are not able to open strong, we may see a return to the bottom of the range at 13831 and perhaps a test of the low at the 13,705.
If a retest of the low does happen, how the bulls respond will mean everything at that moment. In bull markets, typically there are buyers waiting to buy a retest of the low. If they don't show up, bears will trigger stop losses below 13,705 for another leg down and perhaps a return to the bottom of the channel.
Considering that the longer term trend (Monthly, Weekly Charts) is still very bullish, odds are in the bulls favor that they will regain control of the trend for a retest of the 200 day moving average around 15,000 and then the previous structure at 15,500.
The hourly chart shows that Nasdaq is currently in a trading range as bulls attempt to regain control of the trend. Another positive development for the bulls is that they were able to break out of the downward sloping parallel channel, although only slightly there as well.
The weekly chart (not pictured) closed with a doji with the majority of the exhaustion below the open for the week.
This week, bulls need to hope for a strong open to further invalidate the lower low bears put in and to perhaps form a dragonfly doji pattern signaling a potential bottom. If bulls are not able to open strong, we may see a return to the bottom of the range at 13831 and perhaps a test of the low at the 13,705.
If a retest of the low does happen, how the bulls respond will mean everything at that moment. In bull markets, typically there are buyers waiting to buy a retest of the low. If they don't show up, bears will trigger stop losses below 13,705 for another leg down and perhaps a return to the bottom of the channel.
Considering that the longer term trend (Monthly, Weekly Charts) is still very bullish, odds are in the bulls favor that they will regain control of the trend for a retest of the 200 day moving average around 15,000 and then the previous structure at 15,500.
My goal is to find the best risk:reward setups. For instance, if you risk $1,000 at a chance to make $5,000, you can afford to be wrong 4 out of 5 times and still not lose money. I hit my targets over 50% of the time.
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