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Technical Analysis Nasdaq-100, S&P500 and Gold

Technical Analysis Nasdaq-100
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  1. Nasdaq-100 @ 6655

The Nasdaq-100 continues to draw lower relative maxima and minima on the weekly chart, but has regained the exponential of 200 days and 6816. We keep a neutral bias above 6800.

A short-term correction that sustains above 6800 would confirm the breakout and would allow us to defend a bias bullish.

From a trading point of view we highlight the negative divergence on the hourly chart and point out the expected goal for a breakout. The index prepares a gap down opening, so we can suggest a short term plan with a target of 6800. We set a stop at 7040 and the entry should only be made if the index tries to close the gap. The sale should be made at least at 6992 (return/risk ratio of 4). We also continue to defend only 1/16 of the usual risk.

S&P500 @ 2725

The S&P500 regained the range of the last quarter of 2018, cancelling almost all of December’s decline.

We are indeed in a technically neutral zone, but a correction to hold in the 2670/5 zone, or even at the base of the range highlighted on the daily chart, would allow us to maintain a bias bullish and defend a test above 2800.

From a trading point of view, the bias is neutral and the market is over bought. Also in this case we have a clear negative short term divergence, so we can expect a test to the exponential 200 hours and breakout. We defined the 2745 as stop and the 2675 as objective. We continue with 1/16 of the usual risk and the entrance will only make sense if the index tries to close the gap. A sale at 2731 or above would allow a plan with a return/risk ratio of 4.

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Gold @ 1306

We continue to highlight the bullish cross between the exponential of 50 and 200 days. We maintain a positive bias if the price does not go back below 1250/70. The next big reference when we look up, is the 1360/75 interval.




The negative divergence in the daily MACD continues to place the possibility of a retreat that will bring our opportunity to enter next to the supports on the daily chart.

In a short term trading perspective and while the mentioned opportunity does not occur, we suggest an entry at the current levels (1306) with two objectives, 1311 and 1325. We set a stop at 1302. In this case we also defend 1/16 of the usual risk.

What is technical analysis?

 

Technical analysis involves the analysis of an asset by its recent and past price behavior. This behavior is indicated on the chart and reflects the interactions between the offer and demand of the asset. The technical analysis understands that the price of an asset already covers all the relevant information and, therefore, should only observe the price table to determine the evolution and direction, probably the price in the future. When we look at the price behavior, it is very important to analyze the history, because in the technical analysis we can observe the price evolution. It is said that the price has memory because it is very common that after reaching a certain level they behave, at this level, as it happened in the past. In this case, we refer to supports and trends.

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Technical analysis uses quotation, drawn figures, supports and resistances… This type of analysis is usually accompanied by technical indicators such as MACD, RSI, etc. Technical indicators are mathematical formulas and statistics applied to the prices and volumes of an asset in order to provide additional information for the price. However, what is really important for a technical analysis is the action of the price. Technical indicators are used to help make decisions or to systematize an operation, but we must remember that they all use the action of price.

Another aspect to take into account when doing technical analysis is the liquidity of the asset. Liquidity is the ease with which an asset can be bought and sold without changing its price quotation. For example, an asset with little liquidity, if we want to buy a lot of shares suddenly, we can sensibly raise its price. How does this affect technical analysis? The scenarios discussed later in this guide are more reliable the more liquid the asset is, that means it adequately represents the opinion of the majority of the asset.