After the Tech sell-off on 09.06.2017, a consolidation zone was formed at NDX. It is very likely to send the index in choppy trading during the summer months. In this situation, it is very good to use the support areas for buy orders and the resistance zones for sell orders. Below 5780 sells and over 5640 buys, as we need to be careful in case of a breakout to reverse positions. A slight riskier level is 5707, where we can look out for long positions when the price is above that level and short positions when below.
Leaving the consolidation zone and a real breakthrough (at least three closed bars) above or below the locked distance will give direction to the market.
The strategy is quite simple, but in this case, it is appropriate, as Wall Street's positivism has diminished and investors are likely to remain cautious before the summer months.
We must not forget that any historical results from implementing the strategy are not a guarantee of future results.
Trader Nikolay Georgiev
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