Trading Plan for Wednesday, May 22nd, 2024
Trading Plan for Wednesday, May 22nd, 2024
Market Sentiment: Bullish, consolidating within a tight range. Expecting a breakout, but with heightened anticipation due to Nvidia's upcoming earnings after the bell.
Important Note: Nvidia earnings after the bell could significantly impact market direction and volatility. Be prepared for potentially large, unpredictable moves.
Key Supports
Immediate Supports: 5335 (major), 5329, 5322 (major), 5307
Major Supports: 5300-02 (major), 5272-68 (major), 5235-40 (major), 5217-21 (major)
Key Resistances
Near-term Resistance: 5346-49 (major), 5369 (major), 5401-03 (major)
Major Resistances: 5412-15 (major), 5438 (major), 5472-76 (major)
Trading Strategy
Nvidia Earnings Watch: Exercise caution and be prepared for significant volatility following Nvidia's earnings announcement.
Consolidation Breakout: The market is coiling up for a potential explosive move. Focus on the 5302-5347 range for a potential breakout in either direction.
Long Opportunities: Look for bids at 5329, 5322, or 5300-02 if they hold after potential tests. Consider taking profits level to level, especially given the heightened risk environment.
Short Opportunities: Avoid shorting green candles and breaking trends, as the win rate is typically low in such scenarios. However, for those comfortable with counter-trend trades, monitor 5412-15 as a potential shorting zone if price rallies significantly after earnings.
Bull Case
Bull Flag Breakout: The current consolidation range could be interpreted as a bull flag. An upward breakout above 5347 would target 5369 and 5401-03, potentially leading to a strong upward move.
Holding Support: If the 5322 support level holds, expect further consolidation and a potential breakout later.
Bear Case
Breakdown Signals: A convincing break below 5302 would trigger a deeper retracement, potentially retesting the 5272-68 (major) and 5235-40 (major) zones.
Shorting Opportunity: If 5302 is tested and followed by a bounce and acceptance of lower levels, consider entering a short position around 5299 for a level-to-level move down.
News: Top Stories for May 22nd, 2024
🌐 IMF Highlights Cybersecurity Risks to Financial Stability: The International Monetary Fund (IMF) has issued a warning about the increasing threat of cyberattacks, which pose a significant risk to global financial stability. This underscores the need for enhanced cybersecurity measures across the financial sector.
🏦 Federal Reserve's Cautious Stance on Inflation: Minutes from the Federal Reserve's latest meeting reveal a cautious approach towards inflation, with officials prepared to adjust interest rates if economic data warrants. This has implications for future monetary policy and market expectations.
🌍 Global Trade Prospects Brighten: Reports from the IMF, WTO, and OECD suggest a rebound in global trade, driven by easing inflation and a robust U.S. economy. This recovery follows a slowdown in 2023, with significant implications for global economic growth.
📊 Economic Outlooks and Forecasts: Various economic outlooks from entities like J.P. Morgan and Deloitte provide insights into future economic conditions, highlighting the ongoing adjustments in response to geopolitical risks, inflation concerns, and policy shifts. These forecasts are crucial for strategic planning and investment decisions.
Market Sentiment: Bullish, consolidating within a tight range. Expecting a breakout, but with heightened anticipation due to Nvidia's upcoming earnings after the bell.
Important Note: Nvidia earnings after the bell could significantly impact market direction and volatility. Be prepared for potentially large, unpredictable moves.
Key Supports
Immediate Supports: 5335 (major), 5329, 5322 (major), 5307
Major Supports: 5300-02 (major), 5272-68 (major), 5235-40 (major), 5217-21 (major)
Key Resistances
Near-term Resistance: 5346-49 (major), 5369 (major), 5401-03 (major)
Major Resistances: 5412-15 (major), 5438 (major), 5472-76 (major)
Trading Strategy
Nvidia Earnings Watch: Exercise caution and be prepared for significant volatility following Nvidia's earnings announcement.
Consolidation Breakout: The market is coiling up for a potential explosive move. Focus on the 5302-5347 range for a potential breakout in either direction.
Long Opportunities: Look for bids at 5329, 5322, or 5300-02 if they hold after potential tests. Consider taking profits level to level, especially given the heightened risk environment.
Short Opportunities: Avoid shorting green candles and breaking trends, as the win rate is typically low in such scenarios. However, for those comfortable with counter-trend trades, monitor 5412-15 as a potential shorting zone if price rallies significantly after earnings.
Bull Case
Bull Flag Breakout: The current consolidation range could be interpreted as a bull flag. An upward breakout above 5347 would target 5369 and 5401-03, potentially leading to a strong upward move.
Holding Support: If the 5322 support level holds, expect further consolidation and a potential breakout later.
Bear Case
Breakdown Signals: A convincing break below 5302 would trigger a deeper retracement, potentially retesting the 5272-68 (major) and 5235-40 (major) zones.
Shorting Opportunity: If 5302 is tested and followed by a bounce and acceptance of lower levels, consider entering a short position around 5299 for a level-to-level move down.
News: Top Stories for May 22nd, 2024
🌐 IMF Highlights Cybersecurity Risks to Financial Stability: The International Monetary Fund (IMF) has issued a warning about the increasing threat of cyberattacks, which pose a significant risk to global financial stability. This underscores the need for enhanced cybersecurity measures across the financial sector.
🏦 Federal Reserve's Cautious Stance on Inflation: Minutes from the Federal Reserve's latest meeting reveal a cautious approach towards inflation, with officials prepared to adjust interest rates if economic data warrants. This has implications for future monetary policy and market expectations.
🌍 Global Trade Prospects Brighten: Reports from the IMF, WTO, and OECD suggest a rebound in global trade, driven by easing inflation and a robust U.S. economy. This recovery follows a slowdown in 2023, with significant implications for global economic growth.
📊 Economic Outlooks and Forecasts: Various economic outlooks from entities like J.P. Morgan and Deloitte provide insights into future economic conditions, highlighting the ongoing adjustments in response to geopolitical risks, inflation concerns, and policy shifts. These forecasts are crucial for strategic planning and investment decisions.
