US100 SHORT TERM SET UP LONG

kemarin

US100 Analysis: Navigating Key Levels Amid a Downtrend

The US100 is currently in a downtrend on both the intermediate and lower timeframes. However, we are approaching a key bullish order block, which was responsible for creating the all-time high (ATH). Price has not yet violated this level, with a recent candle close holding above it.

Technical Outlook
• 4H and 2H Timeframes:
• Both are in oversold territory, with price exiting the Bollinger Bands.
• The 2H RSI is showing initial signs of recovery, indicating potential short-term bullish momentum.
• 30M Timeframe:
• We are observing a bullish change of character, potentially setting up a lower high along the descending trendline.

Macro Perspective

Historically, January tends to be a volatile month without a definitive trend. With the remaining days of the month, we anticipate more range-bound movements rather than an extremely large downward move. While our longer-term bias remains bearish, expecting a potential move toward mid-19k, we are traders first and focus on opportunities as they arise.

Key Observations
1. Daily Timeframe:
• The daily chart shows a firm close below the 50 SMA, a bearish signal that opens the door for potential moves toward the 100 SMA and lower levels.
• However, we remain reactive, not predictive, as assuming direct moves to specific levels without confirmation is a common trading error.
2. Risk-to-Reward Opportunity:
• At 21,450, we have identified a setup offering a 2.5 R:R opportunity based on the 78.6% Fibonacci retracement.

Plan of Action

Option 1: Intraday Buy Setup
• Action: Place a buy at market open (Sunday night).
• Stop Loss: 21,670 to protect against further downside.
• Take Profit: Target the 21,450 level, aligning with the 78.6% Fibonacci retracement, offering a 2.5 R:R setup.

Option 2: Limit Short Setup
• Action: Place a limit short below a candle close at 21,670.
• Rationale: A close below this level would accelerate a move toward the 100 SMA.
• Stop Loss: Positioned above the invalidation level.
• Target: Mid-range levels, in line with the descending trendline and broader bearish structure.

Important Notes
• Volatility Consideration:
• With January’s historical volatility and range-bound tendencies, there is potential for markets to oscillate rather than make decisive moves.
• As traders, we adapt to what the market presents rather than relying solely on predictions.
• Bias and Flexibility:
• While our long-term bias remains bearish, we approach these setups with a focus on high risk-to-reward opportunities to extract value from the market.

Disclaimer

This analysis is for educational purposes only and does not constitute financial advice. Trading involves significant risk, and you should only trade with capital you can afford to lose. Always conduct your own research and consult with a licensed financial advisor before making trading decisions.

Follow us for more detailed trade ideas, market insights, and strategies! Let us help you stay ahead of the market with disciplined, data-driven analysis.

This version maintains professionalism, clearly outlines risks, and invites readers to follow your profile for more ideas. Let me know if there’s anything else you’d like to add!


Follow us for more expert trade ideas, actionable insights, and market strategies to help you navigate the markets like a pro! Stay ahead with disciplined and data-driven analysis.