Continues to Build a Case for Momentum

It is worth noting that we are getting close to the end of the month, and there will be a lot of money managers out there trying to get into all of the proper stocks that the rest of the world is piling into. 

• The NASDAQ 100 initially shot higher during the trading session on Wednesday but gave bank gains to form a less-than-enthusiastic candlestick.
• Nonetheless, the market is still very much in a bullish consolidation phase, as it looks like we are forming a massive bullish flag.
• The 15,250 level above continues to be a major resistance barrier, and I believe the short-term target.

Underneath, the 14,600 level has a certain amount of significance attached to it, as it was the previous resistance barrier. Because of this, I would anticipate a bit of short-term support, and therefore I think the market will probably continue to see that is an area where buyers jump back in furthermore, the 50-Day EMA sits just below that little block of orders, near the 14,250 level and is rising. In other words, I believe this is a “buy on the dip” type of market.

It is worth noting that we are getting close to the end of the month, and there will be a lot of money managers out there trying to get into all of the proper stocks that the rest of the world is piling into. Remember, there’s a lot of “herd mentality” when it comes to the stock market, and this is especially true when it comes to the NASDAQ 100. Remember, only about 7 stocks make up the top 30% of this index, so as long as the bigger ones are moving higher, so will the index under most circumstances. However, we also have the “blackout period” that companies need to pay attention to, meaning they cannot buy back their stocks. That could set up for a bit of volatility at this point, but until proven differently, I believe this market will continue to find buyers on short-term dips.

As far as breaking above the 15,250 level is concerned, I think it’s going to take some fundamental reason, but if and when we did, it opens up the possibility of a move to the 16,000 level over the next several weeks. That being said, I think short-term traders will continue to look for buying opportunities.

Potential Signal: The NASDAQ 100 continues to be bullish, even though the market struggled during the session to hang on to some of its gains. On a break above the 15,050 level, I am more than willing to start buying again and aiming for the 15,250 level. I would have a stop loss at the 14,800 level. Alternatively, if we go ahead and pull back from here, I would be very aggressive near the 14,700 level to start buying on the dip, with a stop loss at the 14,500 level, aiming for the highs again.

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