Intraday Bounce on NAS100

The Setup

Firstly, on the 1-hour chart, the Nasdaq 100 Index (NAS100) is in a downtrend.  This is illustrated by the downward trend line from November 11th to the current trading session.  Nonetheless, there are signs of a counter trend move on NAS100. Indeed, the Index is at a support zone formed in late October. This zone ranged from 6,583 to 6,812.  Also there is a positive crossover on the MACD as well as the %K of the Stochastics crossing above the oversold level.  Thus, there is an intra-day buying opportunity for NAS100.   Exhibit 1 illustrates the overall setup on NAS100 while Exhibit 2 shows the profitable technical strategies for NAS100 on a 1-hour timeframe.  Moreover, Exhibit 2 shows where the MACD and Stochastics signals stand over the 1-year period.

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Exhibit 1 – NAS100 1-HR Chart

Source: Bloomberg

Exhibit 2 – NAS100 Technical Strategies on 1-hr Chart

Source: Bloomberg

The Reward

The reward entails NAS100 rallying towards the 6,950 to the 7,000 price level.  This is approximately 1.66% higher from current levels.  Indeed, this will take the Index towards the resistance line.

The Risk

However, the risk entails NAS100 falling short of the counter trend rally and moving lower.  This will take the Index 1.18% lower, to the 6,778 price level.

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The Opportunity

Finally, this buying opportunity results in a 1.66% potential gain, risking 1.18%, a 1.41 risk-reward ratio.

The above references the authors opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

I am a Senior Portfolio Manager of the leading Mutual Fund company in the English-speaking Caribbean that has an AUM of approximately US$3Bn. The portfolios I manage comprise mainly traditional asset classes, however, I also trade alternative assets, particularly stock index, forex (including bitcoin) and commodity CFDs. A couple highlights in my career has been launching the 1st tradeable index fund in the Caribbean and a dissertation on US Sector Rotation. I have been a Chartered Market Technician since 2014, one of two in the English-Speaking Caribbean and I am a recent graduate from Cass Business School.
TA qualifications: Chartered Market Technician

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