Friday's day session offered a short opportunity right from the opening. A false breakout in pre-market sealed the deal for the sellers. The prices trended lower the whole day and offered a long opportunity off the 7900 level. One need to realize why Friday's are different:
- the last day of trading before the weekend
- options expiration.
From the chart you can see that the price traveled from the top of the balance to the very bottom. It is exhausted, and the RSI is close to oversold. The downside continuation is possible, like anything when it comes to the market, but keep in mind that shorting at this point is riskier. It is better to see a bounce and then attempt to rip it. The level where the price is parked before the weekend is not only the bottom of the balance, this is also a month of July point of control. Also keep in mind that double bottom has high odds to attract the buyers in attempt to turn around.
If you are a day trader you can take advantage of that level and attempt long. If your mind is set for shorting then it is better to asses the situation first.
Possible scenarios:
1. A pause at the level, consolidation between 2 dotted lines above and below the main level which would serve as a pivot
2. A move lower with a sharp rejection suggesting a false breakdown. Bulls revenge comes after that.
3. A strong move down with high volume without a pause targeting to retest July's low and June's point of control
We are in the midst of the earnings season and the mega techs will be reporting later this month. Stay nimble and objective. The price action is king. Your role is to see which scenario is unfolding and play the odds.
07/20/2019
- the last day of trading before the weekend
- options expiration.
From the chart you can see that the price traveled from the top of the balance to the very bottom. It is exhausted, and the RSI is close to oversold. The downside continuation is possible, like anything when it comes to the market, but keep in mind that shorting at this point is riskier. It is better to see a bounce and then attempt to rip it. The level where the price is parked before the weekend is not only the bottom of the balance, this is also a month of July point of control. Also keep in mind that double bottom has high odds to attract the buyers in attempt to turn around.
If you are a day trader you can take advantage of that level and attempt long. If your mind is set for shorting then it is better to asses the situation first.
Possible scenarios:
1. A pause at the level, consolidation between 2 dotted lines above and below the main level which would serve as a pivot
2. A move lower with a sharp rejection suggesting a false breakdown. Bulls revenge comes after that.
3. A strong move down with high volume without a pause targeting to retest July's low and June's point of control
We are in the midst of the earnings season and the mega techs will be reporting later this month. Stay nimble and objective. The price action is king. Your role is to see which scenario is unfolding and play the odds.
07/20/2019
