Nasdaq analysis: Are we about to break out of consolidation?

We have been in consolidation for nearly 2 months and although we were looking for price to come to the liquidity zone, we think that the price is showing remarkable resilience and shows underlying strength of the market.Price made a low at the begining of june and price attempted to break below the range low , but has quickly reversed.

If you have been following us, we had a premise on Nasdaq. The premise is that, President Trump wants the stock market to be high as he scores his performance based on the stock market. And this premise is proving to be right. So let’s keep a bullish bias.

We have a range within a range. The range low of the inside range has been purged. So the next obvious target is the range high at around 30250. What happens after this will determine what happens. If the price purges the range high and comes back into the range, then price will continue to be in range and potentially reach the liquidity zone. If however, the price goes above the range and is supported by the range high, then liqudity targets near the highs could be in play. And if we have a close above the range high, the algos will go hyperactive and we will have another huge leg up just in time for the November election.

Although it is very tempting to chase the semiconductor stocks, we have chosen not to go after momentum stocks and stick to our high conviction bets. Many are still in downtrends and wont be supported by the Algos. However, we got time in our hands and although the model portfolios are tracking the QQQ performance, we have decided to hold onto our high conviction bets. This might mean a further 3 month 3 month period of underperformance. But that is ok, because after November, there is a good chance that these stocks will start to out perform.

The Space X IPO insiders will start exiting around october just in time for the November election. So if the Nasdaq breaks out and you are a momentum player, then you can chase the space stocks which will be pulled higher by Space X performance.

All analysis done in good faith and not investment advice.

May the Peace of the Lord be with you always.