Price Action and Trend
NQ, like all other equity markets, has been in a strong uptrend since October 2023. However, we’ve recently seen a sharp pullback from the all-time high of around 20,983.00, and now could be the time to look to take long positions.
Support and Resistance
- Key support: Upward trendline around 19,000
- 50-day SMA: 19,607.20 (potential resistance)
- 100-day SMA: 18,868.29 (strong support)
- Resistance: Previous ATH at 20,983.00
Moving Averages
The price is currently between the 50-day and 100-day SMAs, indicating a potential consolidation phase. The 50-day SMA (19,607.20) is above the 100-day SMA (18,868.29), maintaining a bullish long-term structure which is something we need to observe. At the moment, a black swan event is all that could derail this insane market.
Trade Setups
Bullish Reversal Play
Entry: A bullish candlestick pattern near the upward trendline support for an entry (around 19,000)
Stop Loss: Below the 100-day SMA at 18,868.29
Target: Previous swing high around 20,000 and extended move up to all-time high.
Breakout Strategy
Entry: A convincing break and close above the 50-day SMA at 19,607.20
Stop Loss: Below the entry point, around 19,400
Target: Previous ATH at 20,983.00
Bear Flag Pattern
Entry: A break below the current consolidation pattern (if it forms a bear flag)
Stop Loss: Above the flag’s high
Target: Measured move based on the flag pole, potentially towards the 100-day SMA
Outlook
While the long-term trend remains bullish, the recent pullback is likely a buying opportunity. The price action between the 50-day and 100-day SMAs will be crucial in determining the next significant move.
Key levels to watch are the upward trendline support, the 50-day SMA resistance, and any potential bear flag formation in the current consolidation phase.
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