US100 BULLISH SETUP Smart Money Play for US100
With US100 at all-time highs (ATH) and showing signs of overbought conditions, it’s best to look for a well-timed entry in line with the bullish trend, ideally after a slight pullback to a support level. However, caution is essential due to signs of weakening momentum on lower timeframes.
1. Pullback to Support
• Price is well above the daily Ichimoku cloud, the 13 EMA, and the 24 SMA, indicating a strong uptrend. However, the daily RSI has turned down slightly from overbought territory, and price is outside the upper Bollinger Band—these are often signals that a pullback or consolidation could be near.
• For a lower-risk entry, wait for a pullback to key support levels. The 20,600 range aligns with a previous price level where buyers stepped in, making it a key support to watch.
2. Monitor for Volume and Momentum Confirmation
• With the ADL, CMF, and CMO all positive and increasing, underlying buying pressure remains intact. This suggests that any pullback is likely to be corrective rather than a trend reversal, providing a buy-the-dip opportunity.
• If volume remains steady or ADL does not turn negative during the pullback, it would confirm that sellers aren’t overwhelming buyers.
3. Wait for Reversal Signal on Lower Timeframes
• 4-Hour Chart: Overbought signals on the 4-hour RSI (76) and MFI (81) indicate short-term exhaustion. Price could pull back to the 13 EMA or 24 SMA on this timeframe, providing a reasonable entry point once momentum stabilizes.
• 2-Hour MACD: This has turned bearish, showing early signs of short-term selling. Waiting for it to turn back to bullish could give additional confirmation that the pullback has ended.
4. Timing an Entry on Reversal Signals
• Watch for a bullish signal on the 4-hour MACD or RSI as price approaches a support level, ideally the 20,600 range or the daily 13 EMA. If indicators turn bullish again after a small pullback, this would confirm a buy entry.
Trade Ideas
1. Buy-the-Dip Continuation Play:
• Entry: Look to enter on signs of reversal in the 20,600 range or near the 13 EMA, confirmed by a bullish shift in the 4-hour MACD or RSI rebounding from oversold levels.
• Stop-Loss: Place stops below the 4-hour Ichimoku cloud or a recent swing low to allow for minor fluctuations.
• Target: Aim for a continuation to new ATHs, with incremental profit-taking as the price approaches key psychological levels (e.g., 21,200 or higher). Trailing stops can be used to capture extended gains.
2. Alternative Short Pullback Trade:
• Entry: If price breaks below the 20,600 level and the 4-hour Ichimoku cloud, a short trade could target lower support levels, but this is riskier given the bullish sentiment.
• Stop-Loss: Tight stop above recent highs.
• Target: Initial target near the 13 EMA on the daily or the Ichimoku cloud support.
Summary of Smart Money Play
1. Trend Bias: Bullish, in line with the strong daily uptrend.
2. Setup: Wait for a pullback to 20,600 or daily moving averages for a lower-risk entry.
3. Entry Trigger: Confirmed by bullish reversals on the 4-hour MACD or RSI.
4. Risk Management: Stop below key support, targeting ATH or higher levels.
