Trade of the week: long S&P 500
Since the S&P 500 is bouncing off significant support we would like to go long at 6,646 or below with a stop-and-reverse order at 6,499 and an upside target around 6,800 and above.
(Partial video transcript)
This week's trading opportunity
Axel Rudolph: Hello and welcome to "Trade of the week" on Monday the 24th of November. And this week, what I would like to do is try something that I tried last week, which failed dismally. Last week, as you may remember, I thought it was a good idea to go long the Nasdaq 100, and we got stopped out straight away. But, since then, we've tested some really major support and it looks to me that we are bouncing back.
Now, I don’t want to go long the Nasdaq, but I'd like to go long the S&P 500. As you can see here on the chart, we basically retested the lows seen in October and held there on Friday. Friday afternoon, we managed to bounce back and I believe it being also Thanksgiving week and Black Friday, it may well be a bullish week for us.
So, for that reason, and also because technically we've held at this major support, I'd like to go long the S&P 500 around current levels, let's say at 6,646 on this Daily Financial Bet. But we are not just going to use a stop-loss below this low here at 6,499, but a stop-and-reverse order just in case something similar to last week happens in that we fall through major support, in which case this could actually be quite a significant top and we could fall for several more weeks. But let's see what the market actually does. So, the "Trade of the week" for this week is to go along the S&P.
Previous weeks' trading outcomes
Now to take a look at last week's Nasdaq 100 trading outcome. You can see on the chart we had this support being tested here at the 7th November low on the 14th November. And I thought because that was a hammer formation that we would get a daily close above there on Monday. We didn't, we actually came down and on Tuesday we'd got stopped out on the long Nasdaq position. So that lost us 2%.
And the week before, I thought it would be a good idea to buy Cable, GBP/USD. And that worked out quite well, but we didn't hit our upside target, and the horizontal line is where we are long from some $1.3080, I believe. So, we're back in positive territory having slid slightly below there last week. But because our stop is still down at the 4th November low at $1.3010, we would keep our stop here just because of the Budget on Wednesday and that may create a little bit of volatility in the short term. So, that was the Trade of the week from two weeks ago.
This week's trade in summary
And coming back to this week's "Trade of the week", it's to go long the S&P 500 at around current levels, 6,646 or 7, with a stop-loss below the low seen in October at 6,499. And an upside target probably in the 6,800 area, or maybe we may even make new all time highs.
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