NASDAQ Bullish firm; to test 13K
As heads up weeks ago, now it is clear that the consequent market action is bullish.
The weekly chart clearly showed the consolidation in June, and the robust breakout in July, with a strong bullish looking candle (nice lower tail and close very near at the top) to end the week. Technical indicators are aligned with momentum.
13K resistance should be tested, and appears likely to break.
The daily chart has a lot more detail, and takeaways too...
Last weekend, it was expected that "an early to mid week retracement, and then a possible uptick."
Not only was it perfect, the uptick was exceeded!
Firstly, the mid-week move was a bit of an unusual response to the FOMC raising rates by 75bp. Then the momentum followed through, and the week ended with a significant gap up - Gap & run style, stopping just at the 13K resistance. Thursday's move completed the trend reversal pattern of a series of Higher High (HH) and Higher Lows (HL) denoted by the yellow lines through point 1 to point 5. Upon breaking above the high at point 3, that was pretty much the completion of the trend reversal.
Now, clearly bullish and all, we do not go in all guns blazing, and here is why:
There is a clear and immediate 13K resistance, and the weekend brings a possibility of a Monday retest of the gap. Although expected that the retracements should be shallow, the daily RPM is indicating a very much reduced rate of acceleration. Small signs like these are like cracks in the wall.
Oh, btw... Have you seen the Monthly chart? It is so beautifully crafted with a huge Marubozu type candle engulfing a significantly large bearish June candle. This suggests three things:
1. Next couple of (2, maybe if we lucky 3) months are likely to be bullish;
2. The bear trend is broken; and
3. More importantly, the range of the (last 2) monthly candles suggest a significant range of volatility ahead
And so, towards the upside target we go!
The weekly chart clearly showed the consolidation in June, and the robust breakout in July, with a strong bullish looking candle (nice lower tail and close very near at the top) to end the week. Technical indicators are aligned with momentum.
13K resistance should be tested, and appears likely to break.
The daily chart has a lot more detail, and takeaways too...
Last weekend, it was expected that "an early to mid week retracement, and then a possible uptick."
Not only was it perfect, the uptick was exceeded!
Firstly, the mid-week move was a bit of an unusual response to the FOMC raising rates by 75bp. Then the momentum followed through, and the week ended with a significant gap up - Gap & run style, stopping just at the 13K resistance. Thursday's move completed the trend reversal pattern of a series of Higher High (HH) and Higher Lows (HL) denoted by the yellow lines through point 1 to point 5. Upon breaking above the high at point 3, that was pretty much the completion of the trend reversal.
Now, clearly bullish and all, we do not go in all guns blazing, and here is why:
There is a clear and immediate 13K resistance, and the weekend brings a possibility of a Monday retest of the gap. Although expected that the retracements should be shallow, the daily RPM is indicating a very much reduced rate of acceleration. Small signs like these are like cracks in the wall.
Oh, btw... Have you seen the Monthly chart? It is so beautifully crafted with a huge Marubozu type candle engulfing a significantly large bearish June candle. This suggests three things:
1. Next couple of (2, maybe if we lucky 3) months are likely to be bullish;
2. The bear trend is broken; and
3. More importantly, the range of the (last 2) monthly candles suggest a significant range of volatility ahead
And so, towards the upside target we go!
