We're NOT out of the Woods yet on TECH - Short Term - Day Trade

9 thg 10, 2020

Here I'm going to talk about the potential movements of the Tech sector today.
Let me know how it goes for and how you view this recent attempt at a Tech Sector rally.
If this analysis helps, I'd really appreciate a like, it lets me know that what I'm doing is good work.

Best of luck and Stay Disciplined

Yesterday Technology tried to rally and was on a strong path upwards, that was until Nancy slapped the market with the news that no stimulus was coming.

This morning we are opening just below yesterday's high of 2090 and traders will be wanting to know is this it? Is this the day we finally break 2100 and continue with the Tech Rally.

However as always at these levels, there is the smell of weakening momentum and profit-taking with the uncertainty caused by a lack of stimulus and the upcoming election. Furthermore with semi-conductors (SOX) recently being overextended and experiencing some profit taking there is the potential of Semiconductor downside infecting the overall tech rally.

As always I will be trading the S5INFT via TECLand TECS.

Move Up:

Most important to confirm true movement a break of the Major Resistance at 2100 will be required. This will bring us out of the correctio range we have been in since the recent tech crash.
This will also cause a spread of the Bollinger bands from their recent flat range indicating upwards volatility. Furthermore, this will be a clear move over Fibonacci P and into the upwards parallel channel.

From the constituent analysis volume in MSFT, AAPL and NVDA have been weakening as prices continue in the current range. However, all 6 major components of this index remain over important support points
MSFT:$210, AAPL:$115, NVDA:$550, V:$200, INTC:$52 and MA:$345. Although, they remain tightly bound to these points and no high volume push away from these cliff edges has been seen as of yet.

Therefore to confirm the upwards movement be patient for a break of 2100, watch for increased volume up above constituent stock support points.
Resistance to break for constituents are MSFT: $212.5, AAPL:$116, NVDA:$555, V: $204, INTC:$53.5

Move Down:

Although I do not predict a major further hit down at this time I see indications that investors may not be willing to remain invested at these current levels due to great uncertainty regarding the economy and election.
Volumes of constituent technology stocks have been dwindling in the last few days as prices remained stagnant causing the 25d MA to cross below the 50d MA showing some short-term weakness. This may be an indication of fewer expectations of further rallying and a pause to wait for lower buying opportunities. However, watch out for further movements up which could cause high volume to move back in due to FOMO.

The first indication of weakness from an index level will be a break of the 2072 support. This will show a lack of momentum further above the price range of the last 30 days. This point could act as an initial shorting position.
A further break of the parallel channel of the past 2 weeks will indicate further selling towards 2034/50d MA. Although resistance will be shown at the parallel channel at 2067 (FIB R1), unless a movement above 2072 occurs further
downside will follow.

On the constituent level support points to initially break will be MSFT: $211, AAPL:$115, NVDA:$550, V: $203, INTC:$53. Further downside will be shown by high volume drops below MSFT: $210, AAPL:$114, NVDA:$545, V: $202, INTC:$52.

Verdict:

Overall this is a tricky one as new ranges always bring uncertainty. Therefore always wait for confirmation of the direction. Missing out on slightly cheaper prices will not be worth the risk of downside if a movement is not properly confirmed.
I hope this analysis is helpful for those of you who are uncertain of the direction today.