NAS100 Technical Analysis and Next Week's Trading PlanTrend Overview:
NAS100 has recently completed Wave 5 of a higher-degree impulsive structure, indicating a potential trend reversal or a corrective move is imminent. This is consistent with Elliott Wave Theory, where after a 5-wave move, the market typically retraces in a corrective 3-wave pattern (ABC).
Key Structural Observations:
Wave 5 Characteristics: Sharp rally towards 21,247.5 suggests exhaustion of bullish momentum as it aligns with a liquidity zone.
Significant Break of Structure (BOS): A bearish BOS at the daily level signals potential trend weakness.
2. Technical Components
A. Elliott Wave Analysis
Current Count:
Wave 5 Completion: The chart shows Wave 5 at 21,247.5.
Expectation: A corrective Wave ABC towards lower levels, targeting key support zones.
Next Move:
Wave A: Likely to move toward the dealing range low (20,465.8).
Wave B: A shallow retracement before further downside.
B. Harmonic Patterns
Bearish Harmonic Pattern Completion:
The harmonic structure completes near 21,247.5, a confluence zone marked by Fibonacci extensions (0.786 of Wave 4 and 1.272 extension of Wave 3).
Expect strong selling pressure near this level.
Harmonic Implications:
Downward targets align with Fibonacci retracements:
38.2% at 20,758 (minor support).
61.8% at 19,777.5 (major support).
C. Order Flow and Liquidity
Liquidity Zones:
Buy-Side Liquidity (BSL): Stops above 21,247.5 represent trapped buyers in the rally, making this level a magnet for liquidity grabs.
Sell-Side Liquidity (SSL): Stops below 20,465.8 will likely get targeted during the correction.
Point of Control (POC):
POC at 19,493.2: A high-volume area that aligns with the lower end of the dealing range, marking a potential demand zone.
D. Volume Profile
Volume Concentration:
Significant buying volume occurred in the range 20,758–19,888, suggesting this range will act as initial support during a pullback.
Low Volume Areas (LVAs):
Thin volume between 21,000 and 21,247 indicates potential for a rapid decline if selling pressure emerges.
3. Key Levels
Resistance Levels:
21,247.5:
Major swing high and harmonic completion zone.
High-probability reversal area.
Support Levels:
20,758: Minor support (38.2% retracement).
19,777.5: Major support (61.8% retracement).
19,493.2: Final support zone (Point of Control and low of dealing range).
4. Next Week's Trading Plan
Scenario 1: Bearish Move (Primary Plan)
Short Setup:
Entry: Enter short positions near 21,247.5, targeting liquidity above this level.
Stop Loss: Set stops above 21,300 (beyond the invalidation of Wave 5).
Profit Targets:
Target 1: 20,465.8 (sell-side liquidity zone).
Target 2: 19,777.5 (major Fibonacci support).
Target 3: 19,493.2 (POC/demand zone).
Rationale:
Exhaustion of Wave 5 aligns with harmonic completion and liquidity grab.
Scenario 2: Bullish Move (Secondary Plan)
Bullish Setup:
Entry: Enter long positions if price retraces to 20,758–19,777.5 and shows bullish rejection (e.g., pin bar, engulfing candle).
Stop Loss: Set stops below 19,424.3 (final invalidation of bullish structure).
Profit Targets:
Target 1: 21,138.9 (prior swing high).
Target 2: 21,247.5 (retest of highs).
Rationale:
The correction might end within the identified dealing range, providing a favorable risk-reward for longs.
5. Key Validation and Invalidation Levels
Bearish Bias Invalidated:
Sustained break above 21,300 suggests continued bullish momentum.
Bullish Bias Invalidated:
Break below 19,424.3 invalidates bullish correction, signaling deeper retracement.
6. Risk Management
Position Sizing: Keep risk per trade between 1-2% of capital.
Risk-Reward Ratio: Aim for 3:1 or higher.
Max Loss for the Week: Do not exceed 5% drawdown.
7. Additional Considerations
Economic Calendar: Monitor macroeconomic data that could impact U.S. indices.
Market Sentiment: Watch for news and earnings that may affect NAS100 components.
Live Order Flow: Track changes in real-time to confirm bearish/bullish moves.
