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My goal is to establish the most likely path that the price of a particular asset will undertake and profit through ETF instruments both on…

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TQQQ (3 x Long NASDAQ 100 ETF): Long Setup

Daily time frame QQQ:

  • Following the April Island reversal, which established the end of the up leg from the February low, the initial decline has been sharp (Although not impulsive) reaching the 0.382 retracement. However since the May 6 low price had been forming a base.
  • Today's bottoming tail has tagged a "speculative" trend line from the February low
  • The RSI (14) so far is displaying a positive divergence
  • If the May 6 lod holds price could be carving out a Double Bottom that has a measured target at the April Island Reversal gap fill. There is a huge resistance cluster at the triggering line ( 200 dma and 50 dma)
  • The question is if this pattern is establishing a bottom or instead it is a continuation pattern to the down side

QQQ Daily Chart
Larger Image

60 minute time frame QQQ:

  • There is a chance that the overlapping decline from the May 11 high is carving out a Falling Wedge
  • If the Falling Wedge plays out it can be either an Ending Diagonal or a Leading Diagonal. If it is the former the Double Bottom could pan out while if it is the latter a bounce is likely but it will establish a lower high and more downside should be expected in the weeks ahead
  • Either way in my opinion the R/R is tolerable

QQQ 60-Minute Chart
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  • Hence I am going to wait and see if first the Falling Wedge plays out, in which case I will open a long position in TQQQ

TQQQ 60-Minute Chart
Larger Image

 

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