By Chloe Edwards, Trade With Precision
As a trend trader my job is to “make hay while the sun shines”, and as such I have continued to focus my attention on the recovery of the indices, as this has yielded several swing trading opportunities.
The US Indices seem to have outperformed many of the other index markets. The US NDAQ 100 last Friday swept up through the previous all-time high of 9,752.43, seen in February just before the month-long pandemic-triggered crash of February/March. I will continue to look for bullish trend trading opportunities on this, as well as the other major US indices, but will still be keeping my risk low in these unprecedented times.
Looking at the daily chart of the US NDAQ 100 above, I can see that price has broken to a new high over the past few days and has now breached the major round number level of 10,000. I also notice a continued uptrend in price action with higher highs and higher lows.
There is bullish moving average (MA) geometry, with the 10, 20, 50 and 200 EMAs lined up in the correct order and pointing in the direction of the uptrend. The MACD and RSI indicators are both strongly converging with price, suggesting that there may be further momentum to the upside. I will be awaiting a pullback down to the buy zone around the 10 and 20 EMAs, which currently coincides with the previous high of 9,752 before looking for a small bullish candle to print in this area for a potential long opportunity.
Since price has never been above the current level before, there is no level of horizontal resistance above, and as such I do not have a target in mind, aside from keeping an eye on the major round numbers. I will also look to the lower timeframes to find potential trading opportunities, as this may offer the benefit of finding a higher reward to risk opportunity than trading on the daily timeframe.
On the four-hourly chart, I can see an uptrend in place, with price action forming higher highs and higher lows, and the 10, 20, 50 and 200 MAs lined up and showing good bullish geometry. The MACD and RSI indicators are trending higher in a bullish fashion showing convergence with price, which could confirm the trend momentum to the upside.
The combination of this price action and the indicators suggests to me the potential for possible long trading opportunities, so I am currently looking for a pullback into the area around the 10 and 20 MAs on this timeframe, which would also coincide with the strong round number level of 10,000. I will be waiting for a small bullish candle to print around this area, and if this happens, I will use this as the basis for a long entry.
Without a target in mind, it may be prudent to progressively scale out of the trade as price continues upwards, while also trailing my stop loss beneath the swings.
Stay safe and healthy, and happy trading.