The speed enhance got here in, as anticipated, at half a %, displaying that the Fed goes for the most secure play as an alternative of pushing for a .075% enhance.
With that announcement, the market made a late-day rally. Whereas all the main indices have related worth motion, we are going to give attention to the tech-heavy Nasdaq 100 (QQQ), which was capable of clear its 10-day shifting common at $323.12. With the QQQ coming off current lows and with an in depth over the 10-DMA, this does current a great short-term commerce alternative.
Anybody who’s in search of long-term trades might want to fear about overhead resistance, because the market has been rangebound not too long ago. To get a greater understanding of this, we will take a look at the above chart. The obvious threat space primarily based on a day by day chart of the QQQ is the current low at $309.65. If we make a commerce with a stop-loss round $309.65 and enter at at this time’s closing worth of $329.60, primarily based on a 2/1 risk-reward, we are going to take a revenue goal close to $369.50. That’s simply over the 200-DMA and proper below key resistance from the earlier excessive in March at $371.83.
This is not a foul spot for a revenue goal if the QQQs can get via the 50-DMA at $341.34. With that stated, that is primarily based on Wednesday’s closing worth. If QQQ gaps up greater on Thursday, this commerce wouldn’t look so appetizing, as the primary goal would then be previous key resistance. Additionally, we would not need to purchase QQQ close to its upcoming resistance degree on the 50-DMA.
All in all, QQQ is an efficient commerce instance; nonetheless, if threat/reward does not align, it is higher to search for one other image to commerce or look forward to a greater entry worth.
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ETF Abstract
- S&P 500 (SPY): 50-DMA subsequent resistance at 436.37.
- Russell 2000 (IWM): 199.26 resistance.
- Dow (DIA): 340.82 pivotal.
- Nasdaq (QQQ): 341.34 resistance.
- KRE (Regional Banks): 63.80 now help.
- SMH (Semiconductors): 253 resistance.
- IYT (Transportation): 255 resistance.
- IBB (Biotechnology): 126 resistance.
- XRT (Retail): 75 resistance.
Forrest Crist-Ruiz
MarketGauge.com
Assistant Director of Buying and selling Analysis and Schooling
Mish Schneider serves as Director of Buying and selling Schooling at MarketGauge.com. For almost 20 years, MarketGauge.com has offered monetary data and training to 1000’s of people, in addition to to massive monetary establishments and publications resembling Barron’s, Constancy, ILX Methods, Thomson Reuters and Financial institution of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of many high 50 monetary individuals to comply with on Twitter. In 2018, Mish was the winner of the Prime Inventory Decide of the yr for RealVision.
