Trades to Watch: 1-5 Mar
Hope you've all had a profitable February, now onto March.
I'll do a run down of the different charts that I'm watching across indices, forex and commodities.
US Russell 2000
Zoomed-out on the daily.
Zoomed-in on the daily
As you can see in the top chart where it's zoomed-out, the Russell has been trending upwards nicely since late September without interruption. However, on Thursday we saw a very bearish engulfing candle telling us UNEQUIVOCALLY that there were more sellers in the market than buyers.
Before this we saw that the Russell rejected all-time-highs 3 times! This 2308 key level is clearly significant.
Then on Friday we saw a Doji candle form, telling us that the market is experience indecision, this perfectly coincides with the previous key level, a level which was tested back in mid-January, and then it eventually broke through where it may become support...hence the market's indecision.
Price action is telling us that the market currently isn't ready to move higher to all-time-highs, but it always sees the glaringly obviously possible new support level where price closed over the weekend.
So for this reason I'll be keeping a very careful eye on price action this week on the Russel to see if we get a signal either way, whichever way it chooses could be significant for a next long term trend.
If you want to find the start of the next big trend then you need to look for a non-trending market, currentl the Russell is still long term bullish, but we are certainly stalled at a level of indecision, so let's see what comes of it.
Pretty tempted to short the NASDAQ purely based on the based the fact that it's broken that bullish trendline for the first time in yonks. The 5 exponential moving average has crossed underneath the 50 ema and technically I think this is now a short.
I'm not a fan of shorting indices personally. But if you look at it objectively and you have balls big enough to short tech stocks, then have at it, you could place your stop-loss pretty close around 13,500 and just hold until the 5 crosses back above the 50.
Alternatively the other play on NASDAQ, probably the play I'll choose this week, is to wait for a setup candle formation that tells me via price action whether we have more buyers or sellers. I'll wait for a pin bar or engulfing candle to confirm then jump in. I'll update people as to my entry on this via Twitter.
That last green candle that we're seeing on the USD/CHF is a bullish engulfing candle telling us that there are more buyers in the market than sellers. This, combined with the fact that the price action has pushed its way over the key level is a decent indication that we could get an impulsive move up towards that next marked key level of 9200, then I'd manage it by moving your stop loss to breakeven and tracking the price upwards to try and take advantage of any move higher still. It would be sensible to take partial profit at that level in case the target key level of 9200 acts as resistance.
After having recently rejecting that key level on EUR/JPY and then forming a bearish engulfing candle I'd be looking for a pull back on this pair in the coming days. I'd whack a stop loss just above the green which of Thursday's candle rejecting the highs.
A nice pull back on natural gas last week, and some great clear levels of support/resistance to get into trades with low, measurale risks.
I'd be looking to get long on Monday aiming for 2933, then take partial profit, move stop loss to break even and then continuing on up to 3383 or even higher.
This is a nice low risk trade, I'll whack my stop loss just below Friday's candle which is below that key level, so let's say at 2680.
Happy trading everyone, follow me on Twitter for updates on these positions and others that I'm taking. I'd love to hear how you're getting on with your own trading.