First things first, it's never smart to short a bull trend. As anyone who has tried shorting a bull trend in the past can tell you, resistance more often than not becomes support.
With that said, here is the daily chart of Nasdaq showing a bull channel (yellow) within a larger bull channel (purple). As you can see the price is at the top of both of them.
As seen in the past when price reaches the top of these channels, the price could stay at the top for 1-10 days and then correct. This does not mean this will happen. It is worth being aware of, at the very least.
If you're aggressive and you want to short here, be prepared to hold for up to 10 days with slightly higher highs as it rides the top of the channel upwards. Also be prepared for the scenario where the price breaks out above the yellow channel and maybe even uses it as support for a more parabolic move higher.
In terms of risk reward, this is a decent short entry with a low probability of success given the bullish trend. Trade accordingly.
Please see my previous idea below where I was able to call the top of SPY using a very simple and similar trend line / trade setup.
With that said, here is the daily chart of Nasdaq showing a bull channel (yellow) within a larger bull channel (purple). As you can see the price is at the top of both of them.
As seen in the past when price reaches the top of these channels, the price could stay at the top for 1-10 days and then correct. This does not mean this will happen. It is worth being aware of, at the very least.
If you're aggressive and you want to short here, be prepared to hold for up to 10 days with slightly higher highs as it rides the top of the channel upwards. Also be prepared for the scenario where the price breaks out above the yellow channel and maybe even uses it as support for a more parabolic move higher.
In terms of risk reward, this is a decent short entry with a low probability of success given the bullish trend. Trade accordingly.
Please see my previous idea below where I was able to call the top of SPY using a very simple and similar trend line / trade setup.
Comment:
Zoomed in:
My goal is to find the best risk:reward setups. For instance, if you risk $1,000 at a chance to make $5,000, you can afford to be wrong 4 out of 5 times and still not lose money. I hit my targets over 50% of the time.
