Good morning, fellow traders! In today's market update, we turn to Vet, our experienced contributor known for his keen eye on market trends. Let's delve into Vet's analysis of the NASDAQ index (NQ) chart, where he uncovers exciting trading prospects.
Vet's sharp observations reveal the presence of Bollinger bands and significant supply and demand levels on the NQ chart. Drawing attention to the orange gravity points, he highlights their importance as a pivotal area to monitor closely throughout the week.
A closer examination uncovers a breach of structure, which Vet believes could signal a potential shift in market sentiment. Noting the temporary breach and subsequent close below the breached level, he suggests keeping a watchful eye on a possible retest of Friday's low at 13,307—an essential support level.
Using the top two candles on the four-hour chart as a reference line, Vet identifies the potential for a return to the pre-breach level if the market demonstrates price acceptance above this line. This development could indicate a favorable trading scenario worth considering.
Vet emphasizes the significance of the daily chart structure, especially in the event of a confirmed breach. Should this occur, he expects the emergence of legitimate supply once the April lows are surpassed. These levels present enticing trading opportunities that traders should keep on their radar.
Examining the weekly demand zones, Vet highlights the critical level at 13,200, with the possibility of an actual demand zone further down the line. These zones play a pivotal role in determining future price movements and should not be overlooked.
While supply currently remains dormant due to the absence of a breach of structure, Vet observes recent price action that hints at potential supply build-up. Traders are advised to closely monitor the candles from Wednesday and Thursday, as they may provide valuable insights for future trading decisions.
Furthermore, Vet draws attention to NQ's overbought condition on the weekly timeframe. As the red dot descends and the blue line potentially crosses below 75, he identifies the emergence of supply. This development could impact the price range between 13,450 and the current lows of 13,350, providing traders with an enticing profit opportunity of approximately 100 points in the NQ.
In closing, Vet reminds traders of an upcoming event to consider—Home Depot's earnings report scheduled for Tuesday afternoon. Being the only major earnings announcement on the horizon, Vet recommends paying close attention to Home Depot's options as they may offer intriguing trading possibilities.
That concludes today's market insights from Vet, your trusted analyst. Stay tuned for further updates throughout the day, and may your trades be prosperous. Until next time!
Peace,
The ITG Team
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