The Nasdaq recovered yesterday's losses, and enough to trigger a possible 'bear trap' from a redrawn channel. Measure risk on loss of 4,052.
The 'bear trap' in the Russell 2000 is also a longside opportunity. Play for a move to hashed-line channel resistance. Technicals are not oversold, which may lead to a secondary push lower - so a long trade needs a stop.
For Wednesday, hold for further upside, using Monday's lows as an area for stops. A break of Monday's lows would not make for a great short-side play as the potential for whipsaw would be high. But the 200-day MA is an alternative downside target; assess risk:reward accordingly (today's highs as a stop for short-side positions???)
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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com.
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