SQUEEZE CONFIRMATION:
TTM showing 4 red dots (last 5 days)
BB-KC compression backing this up
Rock bottom volatility
Volume heavily declined since NVDA's CEO quantum computing news selloff.
CURRENT TECHNICALS:
- Neutral ADX/DI readings
- Strong EMA resistance (14/21)
- MACD showing no direction
- RSI flat at midpoint
- Price coiled tight under EMAs
- Extremely low volatility
Looking like the calm before the storm
POTENTIAL TRADE SETUPS:
BULLISH CASE:
-Wait for break above EMAs with volume
-Long CALLs or shares on EMA break (manage risk here, 2-3% of account for CALLs)
-Stops below recent low or below EMAs
-Target previous swing high; if strong breakout QBTS is likely going to fill the gap so you can target low of the candle before the drop.
BEARISH CASE:
- Short on failed EMA test + volume
- Alternatively you can buy PUTs or sell CALL credit spreads
- Can also place PUT debit spreads to limit IV crush
- Stops above EMAs
- Target recent lows
- Same 2-3% risk rule
NEUTRAL PLAY:
- Iron Condor to profit from continued chop
- Set wings outside BB bands (or even outside KC)
- Manage at 50% profit
Remember: Squeezes can break either way. Let price action be your guide. No bias is best bias.
TTM showing 4 red dots (last 5 days)
BB-KC compression backing this up
Rock bottom volatility
Volume heavily declined since NVDA's CEO quantum computing news selloff.
CURRENT TECHNICALS:
- Neutral ADX/DI readings
- Strong EMA resistance (14/21)
- MACD showing no direction
- RSI flat at midpoint
- Price coiled tight under EMAs
- Extremely low volatility
Looking like the calm before the storm
POTENTIAL TRADE SETUPS:
BULLISH CASE:
-Wait for break above EMAs with volume
-Long CALLs or shares on EMA break (manage risk here, 2-3% of account for CALLs)
-Stops below recent low or below EMAs
-Target previous swing high; if strong breakout QBTS is likely going to fill the gap so you can target low of the candle before the drop.
BEARISH CASE:
- Short on failed EMA test + volume
- Alternatively you can buy PUTs or sell CALL credit spreads
- Can also place PUT debit spreads to limit IV crush
- Stops above EMAs
- Target recent lows
- Same 2-3% risk rule
NEUTRAL PLAY:
- Iron Condor to profit from continued chop
- Set wings outside BB bands (or even outside KC)
- Manage at 50% profit
Remember: Squeezes can break either way. Let price action be your guide. No bias is best bias.
Trade active
Not as strong a move as I'd like but I entered the trade at $6.2 with a stop at $5.95, right below the 21EMA.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.