Trade of the week: long Nasdaq 100

(Partial video transcript)

This week's trading opportunity

Axel Rudolph: Hello and welcome to "Trade of the week" on Monday 17th November. And what I would like to do this week, after last week's very heavy selloff in the Nasdaq 100, as we saw rotation out of artificial intelligence (AI) stocks into perhaps more defensive plays. We basically were quite worried now also that the US shutdown is over and the US labour data might come in really, really disappointingly. And, we also saw tech valuations, or tech stocks in general, coming off a lot.

So, the Nasdaq suffered a lot for all of these reasons. And also hawkish Federal Reserve (Fed) comments, I guess. But I believe it's overdone. And especially if you look at the chart, you can see here on the daily Nasdaq chart that we basically went down, retested the early November low, went marginally below it on Friday, but then closed slightly in positive territory. And that gives me hope that we can actually bounce off this low.

It's a hammer formation here, as we saw at the beginning of November. So, I see something similar to what happened then happening again once here. So that's why I would like to go long, with a stop, of course, below Friday's low, because if that know where to go, it's pretty likely that we're also falling through our long term uptrend and heading back down again towards the October low and perhaps even lower than that towards lows seen here in September.

But the trend is your friend. You can see, despite the sharp selloff we saw over the last two weeks, we are still in uptrend because we still have a series of higher highs and higher lows. And, we may be re-testing the downtrend line in this resistance area and perhaps even make new record highs. So for that reason, technically speaking, because we have this hammer formation and fundamentally because perhaps the fear that we saw last week again, like the week before, is perhaps short-term overdone. We have obviously, of course, Nvidia earnings out. That's on Wednesday. So, perhaps until then we could see a rally. So, I'd like to go long the Nasdaq 100 as this week's "Trade of the week". 

Previous trading outcomes

I'd now like to talk about two weeks ago's "Trade of the week", which was to go long gold. And then finally, we got our rally straight up to our upside target. Hit it. And now we've come off again. So that was a nice profitable trade here on gold.

Last week I went long Cable, so GBP/USD. And I waited for a retracement. So, you don't always have to go into a trade straight away. You can sometimes just wait. Sometimes you miss it. But when you do get in you get a better entry level. So, this is what we did here on Monday of last week we were trading up here. My entry order was down here at $1.3110. We got filled on Wednesday and since then, we are in positive territory and what we can now do is move our stop-loss to just below last Wednesday's low - let's say at $1.3080. So, this trade is still ongoing, and our gold trade we cashed in.

This week's trade in summary

Coming back to this week's "Trade of the week', it's to go long the Nasdaq 100. Ideally around 25,200 on the Daily Financial Bet. Our stop-loss will be below last Friday's low at 24,530, and an upside target at least around the 25,600 area, but probably around 26,000. We’ll have to see, as the days go on, how far we want to let this trade run.