DAY TRADE - WILL TECH RECOVER TODAY? - Simple Momentum Trade
Updated
After a recovery yesterday to the pre-Trump infection highs the US premarket today shows further strength up to a Major Resistance on the road towards pre-Tech correction levels.
Sentiment today will likely be cautiously positive (bolstered by on-target/positive jobs numbers), with traders waiting for the signal to buy, buy, buy.
Here are the signals that will allow traders to make intraday moves trading on the S5INFT 3x ETFS
TECL and TECS.
Move Up:
Start the long trade at a clear indication of the upwards movement at 2072 then with a break over the opening price at 2083.
A recovery to previous highs yesterday with concrete support on the 50d MA, momentum picking up on the Day chart, a hit down in classic value sectors (S5REAS, S5UTIL NAD CONS), and room in the RSI levels suggest great upside potential today. Furthermore with premarket levels over the Major resistance of 2083 traders are apparently believing this sentiment as well.
Initially, the market may sell off some of the overnight trades to move down to 2072, this will balance RSI levels and prevent the price from moving too far outside the Bollinger Bands.
If no major break occurs below 2072 a recovery back to the open will provide great momentum to a move towards 2100,although this must be accompanied by major volume buying at 2072 which for its constituent stocks will be approximately $210-
MSFT, $116/$115.5-
AAPL and $564-$562 
NVDA.
Short interest in AAPL(fintel.io/ss/us/aapl), MSFT(fintel.io/ss/us/msft) and NDAQ(fintel.io/ss/us/ndaq) substantially decreased yesterday giving further credence to an upside call and potential break over 2100.
For those more risky and profit-seeking investors, there is potential for a large move up to 2120 although I personally would take a majority of profits at 2100 due to the potential for downside at this level.
Move Down:
Although less likely anything is possible in this market. Fears of further economic damage are still looming and a lack of a true stimulus bill coupled with elections may rest on some investors minds causing cautiousness and profit-taking at these high levels to take place.
An initial move down with high volume could scare investors if the 2072 level is broken, wait cautiously for a break of Fibonacci R1 at 2067 as this will cause fear and major downside to 2057 or 2050. These moves will not likely
be high volume today as the general sentiment is positive however volatility may spike over the coming days.
For the move-down, I will short a small amount below 2072 with a low volume recovery up and increase this position if the price moves below 2067. However, with major volume resistance at 2067, it would be best to exit the trade.
Verdict:
Overall a positive move up to new highs is likely and this would be a high Return On Investment trade if momentum pushes tech to the major resistance at 2100. However, caution of profit-takers is advised.
Good luck and stay discplined.
Don't forget if this worked for you come back and give us a like, if it didn't I'd love discussing what happened.
Sentiment today will likely be cautiously positive (bolstered by on-target/positive jobs numbers), with traders waiting for the signal to buy, buy, buy.
Here are the signals that will allow traders to make intraday moves trading on the S5INFT 3x ETFS
TECL and TECS.Move Up:
Start the long trade at a clear indication of the upwards movement at 2072 then with a break over the opening price at 2083.
A recovery to previous highs yesterday with concrete support on the 50d MA, momentum picking up on the Day chart, a hit down in classic value sectors (S5REAS, S5UTIL NAD CONS), and room in the RSI levels suggest great upside potential today. Furthermore with premarket levels over the Major resistance of 2083 traders are apparently believing this sentiment as well.
Initially, the market may sell off some of the overnight trades to move down to 2072, this will balance RSI levels and prevent the price from moving too far outside the Bollinger Bands.
If no major break occurs below 2072 a recovery back to the open will provide great momentum to a move towards 2100,although this must be accompanied by major volume buying at 2072 which for its constituent stocks will be approximately $210-
MSFT, $116/$115.5-AAPL and $564-$562 NVDA. Short interest in AAPL(fintel.io/ss/us/aapl), MSFT(fintel.io/ss/us/msft) and NDAQ(fintel.io/ss/us/ndaq) substantially decreased yesterday giving further credence to an upside call and potential break over 2100.
For those more risky and profit-seeking investors, there is potential for a large move up to 2120 although I personally would take a majority of profits at 2100 due to the potential for downside at this level.
Move Down:
Although less likely anything is possible in this market. Fears of further economic damage are still looming and a lack of a true stimulus bill coupled with elections may rest on some investors minds causing cautiousness and profit-taking at these high levels to take place.
An initial move down with high volume could scare investors if the 2072 level is broken, wait cautiously for a break of Fibonacci R1 at 2067 as this will cause fear and major downside to 2057 or 2050. These moves will not likely
be high volume today as the general sentiment is positive however volatility may spike over the coming days.
For the move-down, I will short a small amount below 2072 with a low volume recovery up and increase this position if the price moves below 2067. However, with major volume resistance at 2067, it would be best to exit the trade.
Verdict:
Overall a positive move up to new highs is likely and this would be a high Return On Investment trade if momentum pushes tech to the major resistance at 2100. However, caution of profit-takers is advised.
Good luck and stay discplined.
Don't forget if this worked for you come back and give us a like, if it didn't I'd love discussing what happened.
Note
This analysis was constructed prior to Nancy slapping the market regarding the stimulus package.Furthermore, I'm aware the colours of the candles are reversed :)
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