It’s no secret we’ve been pounding the table on healthcare and
biotech being among the markets’ leaders on a go-forward basis, and so
far both sectors haven’t disappointed. As a matter of fact, it’s been
biotech and healthcare that’s kept the markets propped up this week.
Although both sectors won’t necessarily go up in a straight line, we do
continue to believe investors and traders should now start focusing more
on the space.
With that, we’ll be putting out some new ideas once we’re convinced
the major indices are going higher. However, based on what we continue
to see, the markets are still technically in a position to go either
way.
We’ve been referencing 6,255, 6,193 and then just yesterday 6,100 on the NASDAQ Composite as key trigger points. Meaning, a strong close above 6,255 would suggest a bullish trigger, but any sort of developing weakness, and a strong close below 6,193 again – or more importantly a close below 6,100 – could trigger a near-term tailspin to the downside.
It still remains to be seen, but you can see in the daily chart of the NASDAQ below the index couldn’t muster enough strength yesterday to close above that key level mentioned above. That’s no coincidence considering there’s a big tug of war taking place around that level right now – one that’s likely to determine the markets’ near-term direction.
In other words, savvy technical traders know the 6,255 level is key in terms of testing these markets to the downside, or potentially triggering another bullish trade to the upside.
At this point, nobody in their right mind could actually say these markets are headed higher or lower over the next several days. However, we do continue to believe the markets could possibly be in a position to rollover if that 6,255 level can’t be convincingly breached.
We all saw what happened two weeks ago today, so it’s important we don’t blindly jump the gun right now to either side of the trade. But, if there is a better risk/reward opportunity right now for traders, that would be an index short around current levels with a SSL just behind that 6,255 level on the NASDAQ Composite. Just make sure you don’t get caught up in the intra-day moves, but rather use an actual close above 6.255 as your SSL trigger.
It’s not that it’s a high percentage trade that makes the risk/reward attractive, it’s more about the potential downside risk vs. what one could gain in the event these markets do end up moving lower soon.
We’ve been referencing 6,255, 6,193 and then just yesterday 6,100 on the NASDAQ Composite as key trigger points. Meaning, a strong close above 6,255 would suggest a bullish trigger, but any sort of developing weakness, and a strong close below 6,193 again – or more importantly a close below 6,100 – could trigger a near-term tailspin to the downside.
It still remains to be seen, but you can see in the daily chart of the NASDAQ below the index couldn’t muster enough strength yesterday to close above that key level mentioned above. That’s no coincidence considering there’s a big tug of war taking place around that level right now – one that’s likely to determine the markets’ near-term direction.
In other words, savvy technical traders know the 6,255 level is key in terms of testing these markets to the downside, or potentially triggering another bullish trade to the upside.
At this point, nobody in their right mind could actually say these markets are headed higher or lower over the next several days. However, we do continue to believe the markets could possibly be in a position to rollover if that 6,255 level can’t be convincingly breached.
We all saw what happened two weeks ago today, so it’s important we don’t blindly jump the gun right now to either side of the trade. But, if there is a better risk/reward opportunity right now for traders, that would be an index short around current levels with a SSL just behind that 6,255 level on the NASDAQ Composite. Just make sure you don’t get caught up in the intra-day moves, but rather use an actual close above 6.255 as your SSL trigger.
It’s not that it’s a high percentage trade that makes the risk/reward attractive, it’s more about the potential downside risk vs. what one could gain in the event these markets do end up moving lower soon.
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