The QQQ’s ended Friday’s day of trading @ 78.05 and in a 5 minute uptrend that followed a hard sell off into 10:30 reversal time. The prior run up in price could not produce a substantial higher high and thus this run up in price to the 78.09 area will act as Major Resistance and is placing the current 5 minute uptrend in jeopardy. If you look left on the 5 minute chart below, you will notice that there is a sea of overlapping & topping tail bars to the left above the 78.09 price. If price opens neutral on Monday morning I’d be looking for the 5 minute uptrend to end to get short. A failed buy setup or a break of a prior pivot area then a pull back would be acceptable entries short preferably near a reversal time 10 am or 10:30 am. Lower targets would be the 77.88, 78.81 areas with a lower target at the 77.64 area. If we happen to gap below the 77.88 area this would make things easy, I’d short the first sell setup that occurs in this same area. For a long play, we would have to gap above the 78.21 area before I’d look to play a buy setup near a reversal time. We could also open neutral and just grind our way back up to the 78.21 area through a sideways consolidation with the hopes of playing a break out in the afternoon. For me, I like the gap down idea, but as always wait for price to tell you which way to trade… Click on chart to enlarge…
QQQ 5 minute chart 09152013
Shorts: None
Longs: BRCM – Daily buy watch INTC – Gap continuation
JCP – Daily buy watch LLY – Break out watch
MSFT – Money Bar pivot NOV – Daily buy watch
PCAR – Break out watch WAG – Daily 123 watch