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CFD: Ideas You Can Trade- USTech100 Tests Support As NASDAQ Retreats

Posted by Steven Hatzakis on Mar 26, 2014 5:06:00 PM

USTech100: Bullish Trend Tested As Last Support Line Within Reach is Broken

The short term daily candle chart below shows the price of the USTech100 contract for difference (CFD) last trading today near 3,582 (around time of publication) following a drop in the underlying index this CFD aims to track.

After reaching a high earlier today around 3,654, the NASDAQ index retreated to session lows, and closed down 1.3%, as US-stock indexes struggled to keep on track with reaching back near prior record-highs.

Around the same time 14 years ago, in March of 2000, the NASDAQ had reached its all-time record high, before the dotcom bubble burst, and with the market reaching less than a thousand points away from that high earlier this month - it still remains within reach.

The USTech100 CFD has been on a bullish run in recent months but after reaching its latest high under 3,750 on march 7th, 2014, the bullish trend has been on a corrective retreat, with bearish momentum following since then.

There was a trend line breached today near session lows, which is parallel to the bullish lines just above it, and If this bearish momentum continues - then the correction should continue until support is found near 3,400.

If the support line that failed today is regained and able to hold prices, then a strong bounce on this line could follow with steep bullish momentum resuming the medium term trend-momentum and avoiding further the short-term bearish direction. 

Below are examples of how to trade a bearish continuation or a bullish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 3,619 with a Limit to take profit @ 3,699 and a stop-loss @ 3,581 Risk/Reward Summary: Limit risk = +80 points profit / (-38) Stop-loss risk = Gain to Loss ratio =   2.10

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 3,568 with a Limit to take profit @ 3,517 and a stop-loss @ 3,611 Risk/Reward Summary: Limit risk = +51 points profit / (-43) Stop-loss risk = Gain to Loss Ratio =  1.18

Short term chart (daily candles) using prior trend lines and new lines:

ustech100daily march 26 2014 note

A note on CFD’s: A Contract for Difference, or CFD,is a financial contract allowing traders to potentially profit whether markets move up or down and include risk of loss. CFDs are cash-settled based on the difference in the value of an underlying asset from the time a trade is opened to the time the position is closed. A list of available CFDs that can be traded with (WWM) can be found on the WWM website.

In addition to CFDs, WWM - through a third-party - offers direct access to non-US residents to trade exchange trade equities on the US Stock Markets, with more information also available via the WWM homepage.


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