Saturday, August 31

Post-Market Analysis: Nasdaq for the Week of August 26th, 2024


Overview:

This week, the Nasdaq presented a mix of consolidation and sharp moves, providing traders with both challenges and opportunities. Let's review the week's performance in light of our earlier predictions and highlight a successful trade scenario.

Predicted Analysis Recap:

  • Key Resistance Levels: 19,800 - 19,900
  • Key Support Levels: 19,300 - 19,400
  • Expected Movements: A potential drop was anticipated towards support after nearing the 19,800 resistance, followed by a possible consolidation phase.

Actual Market Performance:

  1. Monday & Tuesday: The week began with the Nasdaq approaching the 19,800 resistance level, as expected. On Monday, there was slight upward momentum but no break above 19,800, confirming resistance. By Tuesday, the index began to consolidate, moving between 19,600 and 19,700.

  2. Mid-Week Action (Wednesday - Thursday): Wednesday and Thursday witnessed increased volatility, precisely as predicted. The Nasdaq dropped sharply to test our key support zone around 19,300-19,400. The index touched a low near 19,350, providing an excellent opportunity for traders who positioned for a drop from resistance to support.

  3. End of the Week (Friday): The market saw a recovery attempt on Friday, bouncing back to the 19,600 range but failing to maintain upward momentum, closing at 19,594. This move reflects ongoing market indecision but confirms our bearish bias as the index closed below the predicted resistance level of 19,800.

Successful Trade Highlight:

  • Short Entry at Resistance:
    Traders who followed our recommendation to go short around the 19,800 resistance level were rewarded. As predicted, the index failed to break above this level and subsequently declined to our target support zone around 19,300-19,400.

    Outcome:
    The short trade could have captured a profit range of approximately 400-500 points, from a short entry near 19,800 to a cover around 19,350-19,400. This aligns perfectly with the anticipated market movement and demonstrates the value of technical analysis in identifying high-probability trades.

Key Observations:

  • The resistance level at 19,800 held firm, and the subsequent decline to the predicted support zone offered a profitable trading opportunity.
  • The bounce from the 19,300-19,400 support range shows that while bears controlled mid-week, buyers were present at lower levels, indicating potential consolidation or a base formation for next week.

Looking Ahead:

Next week, watch for another test of the 19,800 resistance. If it breaks with volume, a rally toward 20,000 could be in play. Conversely, a failure at resistance or a break below 19,300 could mean further downside.

Trade Recommendations:

  • Short-Term Traders: Look for new short opportunities near 19,800 or if the index fails to hold above 19,300.
  • Long-Term Investors: Consider accumulating near 19,300, with a stop below 19,100, for a potential reversal play.




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