TECH - Trading The QQQ In Three Time Frames: What's The Upside Potential For Mega Cap Technology Stocks? | Benzinga
"Are you bullish or bearish on the Nasdaq 100?”
I often get asked a similar question for the S&P 500, gold, bonds, individual stocks, Bitcoin, and pretty much anything else you can imagine that has a price.
My follow-up question is always, "Well, what’s your time frame?”
It’s tempting to analyze a chart, measure the trends, break down all sorts of technical indicators, and then boil it down to one single call: bullish or bearish. But mindful investors know that the market moves on multiple time frames, with short-term ripples turning into medium-term waves, which are part of the long-term tides.
Given last week’s sudden rally, reversing the previous week’s dismal deterioration, I thought it would be helpful to focus on the Nasdaq 100 and identify the trends on three different time frames. I think you’ll find that while the tactical time frame appears to be in a bullish phase, the medium-term time frame may provide better clues as to what’s next for stocks.
Short-Term: Rally Mode But Testing Resistance
You can’t deny the strength of the uptrend last week, which provided a stark contrast to the absolute dredging into late October. Going into the end of October, we saw a clear distribution as many of the individual trading days ended near that day’s low. So far in November, most day’s sessions have closed near the top of the daily range.
The last three months have developed a clear pattern of lower highs and lower lows on the chart. Notice how the current upswing appears very similar in price change and time duration to previous rallies in early October and late August?
Now look down to the RSI, and you’ll see that the RSI is right around 60, pretty much where the indicator topped out in those previous two countertrend upswings. So while this recent rally ...