Analysis and trade idea:
The NAS100 (US 100 Cash CFD) is currently exhibiting significant bearish pressure after a notable uptrend that faced resistance around the 21,000-21,100 level. This area aligns with a strong supply zone where multiple rejections have occurred, suggesting sellers are actively defending this region.
Technical Breakdown:
• 4-Hour Chart Analysis: The NAS100 made a lower high after failing to break above the 21,100 resistance. The price action has since shown signs of exhaustion, forming a double-top pattern which indicates a potential reversal.
• Key Levels:
• Immediate Resistance: 21,100 - 21,150 zone. The price has repeatedly failed to close above this level, confirming it as a key resistance.
• Current Price: 20,551.8 (Bid price), which aligns with the middle of a consolidation range and just below a key pivot level.
• Support Zones:
• Initial support around 20,300-20,400.
• Stronger demand zone is identified between 20,000 and 19,900, which previously acted as a major support floor.
• Price Action & Fibonacci Confluence: The rejection from the resistance zone coincides with the 61.8% Fibonacci retracement level from the recent swing high to low, indicating a potential pullback. Additionally, price is testing a blue liquidity zone, suggesting a possible fakeout before a deeper correction.
Trade Plan:
• Entry: Looking for short entries around the 20,550 - 20,650 area after a bearish confirmation (e.g., a rejection candle or a break below 20,550).
• Stop Loss: Placing a stop loss above the recent high at 21,200 to avoid getting caught in any false breakouts.
• Take Profit:
• First Target: 20,300 level where price may find initial support.
• Second Target: 19,900 area, which aligns with a significant demand zone and could provide a more extended downside move.
Risk Management:
The trade setup offers a favorable risk-to-reward ratio, aiming for at least a 2:1 reward-to-risk. By using dynamic trailing stops once the first target is hit, we can lock in profits while allowing the trade to capture a larger move if the bearish momentum persists.
Summary:
Given the current bearish setup, NAS100 presents an opportunity to short from key resistance zones with well-defined stop losses above the recent highs. The technical confluence of supply zones, Fibonacci levels, and price action signals increase the probability of a downside move. Traders should remain vigilant for any reversal signs, especially if NAS100 breaks above the 21,150 mark, which could invalidate this setup.
The NAS100 (US 100 Cash CFD) is currently exhibiting significant bearish pressure after a notable uptrend that faced resistance around the 21,000-21,100 level. This area aligns with a strong supply zone where multiple rejections have occurred, suggesting sellers are actively defending this region.
Technical Breakdown:
• 4-Hour Chart Analysis: The NAS100 made a lower high after failing to break above the 21,100 resistance. The price action has since shown signs of exhaustion, forming a double-top pattern which indicates a potential reversal.
• Key Levels:
• Immediate Resistance: 21,100 - 21,150 zone. The price has repeatedly failed to close above this level, confirming it as a key resistance.
• Current Price: 20,551.8 (Bid price), which aligns with the middle of a consolidation range and just below a key pivot level.
• Support Zones:
• Initial support around 20,300-20,400.
• Stronger demand zone is identified between 20,000 and 19,900, which previously acted as a major support floor.
• Price Action & Fibonacci Confluence: The rejection from the resistance zone coincides with the 61.8% Fibonacci retracement level from the recent swing high to low, indicating a potential pullback. Additionally, price is testing a blue liquidity zone, suggesting a possible fakeout before a deeper correction.
Trade Plan:
• Entry: Looking for short entries around the 20,550 - 20,650 area after a bearish confirmation (e.g., a rejection candle or a break below 20,550).
• Stop Loss: Placing a stop loss above the recent high at 21,200 to avoid getting caught in any false breakouts.
• Take Profit:
• First Target: 20,300 level where price may find initial support.
• Second Target: 19,900 area, which aligns with a significant demand zone and could provide a more extended downside move.
Risk Management:
The trade setup offers a favorable risk-to-reward ratio, aiming for at least a 2:1 reward-to-risk. By using dynamic trailing stops once the first target is hit, we can lock in profits while allowing the trade to capture a larger move if the bearish momentum persists.
Summary:
Given the current bearish setup, NAS100 presents an opportunity to short from key resistance zones with well-defined stop losses above the recent highs. The technical confluence of supply zones, Fibonacci levels, and price action signals increase the probability of a downside move. Traders should remain vigilant for any reversal signs, especially if NAS100 breaks above the 21,150 mark, which could invalidate this setup.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.