Mastering the trading on Nasdaq index! targets and strategy!First of everything, let me introduce you to my chart to not feel lost when I am talking later about the strategy.
*You can see 5 moving averages on the chart, the yellow represents the average of the last 10 candles whilst the dark blue 20, the white 50, the dark purple 100 and the turquoise 200
*On the chart, you can find only 3 trendlines, the top one in yellow is the weekly frame downtrend, the middle one in red on the daily frame and also the upper line of the formed triangle or it could be too rising wedge pattern is the second downtrend line and the third one which as the bottom of them in purple is uptrend on the daily frame.
*On the chart you would find digits from 1 till 5 represent the last five noticed tops or HHs on the daily frame.
===Now let us go to the strategy and analysis===
*The price moved down initially from its ATH after almost reaching to the weekly down trendline (which you may see it now far but because it was drawn on the weekly chart) and also because it did not retest the downtrend in red to settle on and then jump up from. But rather it was pushed down more and it lost even to settle on the top of the bearish engulfing pattern’s high from the 14th July
*Then it lost more tops in a free fall! It lost tops no.4 & 3 (which were also bearish engulfing patterns and their highs are regarded often as strong support areas) and even lost the moving averages 10 & 20. Luckily it found a ground on the top no.2 and retraced up from.
* But will that mean that it will be pushed up to start another bullish run similar to the big one? Answer is no! I do not want to disappoint the long traders but I do not think it will happen and maximum it could reach in that retrace, if it is meant to retrace originally, to the top no. 3 or max 4
*I think you started to figure it out now and say it should go then to the top no.1 which it was before also another bearish engulfing pattern 😉yes that is the point.
* But let us return back to the beginning of the story, why did the index ignore to settle on top no.4, 3 and more likely also top no.2? The answer is because of two reasons. The first is that it reached to the downtrend line on weekly so I was not surprised from the beginning with that huge bearish wave as I expected that to happen. Second reason, that it broke the red down trendline and two tops on the way (I mean now 3 big support levels) so that means that index is going to touch and retest back the uptrend on daily basis in purple and also note please that it broke before the moving average 20 so it will go to moving average 50 which is not by luck too at the retest point at the trendline when price reach to there soon, because of those two reasons I see that it is with 99% the index will continue the strong bearish wave after that temporary bullish retrace ends.
**** Most important now what will happen after the index break through the uptrend line in purple and reach to 19909.94 to top no1 to the top whose green candle sparked and triggered all last bullish run, so the index wants to return back to that base where the bullish rocket was launched from ))? I expect that the daily candle will retrace so strong back from 19909.94 back to test the purple line and in case as per scenario 1 the daily candle will close above that purple line, you would see one of the biggest bullish retraces in Nasdaq ever!! But if the second scenarios will apply when the daily candle will close under that purple line, so that will generate huge and continuous bearish wave ONLY after the index complete its bullish retrace to the purple trendline and after back to moving average 100 and then 200 and could reach to 17794 even!
Conclusion: The index will go regardless any short bullish retrace to 19910 and it could be till 19890 but I will definitely close my trade at 19910 to avoid unnecessary strong bullish retrace and I plan after I close it to open long trade also from that level!
For trading safe, I would recommend to close your trade at 20230 or you can bear the retrace and take your well worth risk and wait till index reach 19910 like what I will do.
NOTE!!! 19910 is also the 0.50% level of my Fibonacci retracement on the daily chart.
I hope that you understand my point of view and I wish you all the best!
My ideas are exclusive to myself only and is not regarded as an advice for traders or investors and are not more than personal thoughts which I just wanted to share with you all and I do hope they could help.
I am not selling any signals and I do not take money favour any trades recommendations. They are free of charge all lifelong but I keep the copy rights of them though to not be copied or shared or sold.
