To The Moon

In my earlier article on the $NASDAQ 100(NDX)$ , I highlighted that the price was supported by a channel and displayed a bullish hammer candlestick. As predicted, the price rebounded. However, it has since corrected more deeply toward another strong level.

The analysis below provides an updated view and highlights the critical support level that will maintain the index's strong bullish stance.

Nasdaq 100 (NDX) Technical Analysis

• Break of Previous All-Time High: The price has clearly broken above the previous all-time high 20500, marking a significant bullish movement. This breakout signifies strong market momentum and a shift in market sentiment to a more bullish tone.

• Flip to Support: After the breakout, the previous all-time high level has now flipped into a support zone. This behavior, known as the "support flip," indicates that market participants view this level as a key price floor, validating it as a strong area of demand at 20500.

Strategic Implications:

• The area around the previous all-time high becomes critical for monitoring price action. Traders should watch for how the price behaves when revisiting this support zone:

• Holding Above Support: If the price consolidates or bounces from this level, it reinforces the bullish structure, potentially setting the stage for a continuation of the uptrend.

• Breaking Below Support: A decisive break below the support could invalidate the bullish narrative and may lead to further downside.

Short-Term Trading with DLCs (Daily Leveraged Certificates):

1. Bullish scenario: Traders can use long DLCs (e.g. $Nasdaq 5xLongSG251216(ITXW.SI)$ ) if the price shows a strong bounce or bullish confirmation (e.g., bullish candlestick patterns, increased volume) at the support level. The leveraged nature of DLCs allows short-term gains to be amplified during uptrends.

2. Bearish scenario: If the support fails and the price breaks below with conviction, traders could use short DLCs (e.g. $Nasdaq 5xShortSG251216(POQW.SI)$ ) to capitalize on potential downside moves.

Things to note when trading DLCs:

• Trading DLCs involves high leverage, which magnifies both potential gains and losses.

• Rapid market volatility can cause significant losses if stop-loss levels are not properly managed.

• DLCs are designed for short-term trading; holding them long-term can lead to value erosion due to compounding effects.

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For more information about DLCs, visit https://dlc.socgen.com/en/education/handbook 

Disclaimer: 

This document is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. This document has been published for general circulation only. 

This advertisement has not been reviewed by the Monetary Authority of Singapore. This post is sponsored by Societe Generale, Singapore Branch. The content of this article does not form part of any offer or invitation to buy or sell any daily leverage certificates (the “DLCs”), and nothing herein should be considered as financial advice or recommendation. The price may rise and fall in value rapidly and holders may lose all of their investment. Any past performance is not indicative of future performance. Investments in DLCs carry significant risks, please see dlc.socgen.com for further information and relevant risks. The DLCs are for specified investment products (SIP) qualified investors only.