Mid Week Analyses: Daily HL signalled, now what?

24. Okt.

24/10/24

Welcome Traders,

In many of my previous posts I stated that I anticipate the signalling of a Daily HL before entering any buy positions. Why? Because with the exception of the weekly TF, this is the largest active TF making a series of HHs and HLs. Therefore, waiting and getting into a trade at this point will guarantee longterm profits until price breaks new all time highs (ATHs).

The daily HL was signalled at 20,001.7 which falls at the 23.6% fib level on the daily chart. Granted this level is not a common retracement level for the NASDAQ. My initial entry point of interest was at 19649.1 capturing another set of sell side liquidity which aligned at the 38.2% fib level more commonly known for retracement. But other key signs which make it a valid end point is that it served as a retest for a previous resistance level that price broke out from and also an area which allowed price to capture sell side liquidity to liquidate any buyers who held their positions.



Moving forward, I will continue to hold my buy positions entered until price breaks new highs. Even though the weekly TF is currently at a LH, it is likely that price will continue bullish to break new all time highs because:
1. The previous daily candle closed with a lower wick indicating strong rejection from support which means that the current daily candle will have to close bullish.
2. The daily TF needs to now complete its trend move of making a new HH which would then push the weekly LH to complete its trend move of signalling a new HH



Another indication that price has resumed its uptrend is due to the bullish volume that is playing out.In less than one day price has already recovered 50% of yesterdays daily bearish candle which signalled the HL suggesting that the bulls have regained their strength. The current bullish volume differs drastically from the volume to signal the 23H LH. In a previous post I stated that the retracement was not over given the fact that it took 5 days and 6 bullish candles to signal the 23H LH. And what happened after that? Price sold to signal the 23H Low or Daily HL. But now that the low points have been met, we are seeing a quick recovery.



In another one of my previous posts I mentioned that when price retraces at a resistance level before breaking new all time highs, it is to acquire enough buyers at a cheaper price likely to result in a bullish rally continuing way beyond new highs. Extending the daily chart out, we can see that price has been respecting a bullish parallel channel since August 5th 2024 and is currently below the channel mid-point indicated by the red dotted line. With the signalling of the Daily HL price should not only break new all time highs, but continue working its way up to:

• 21,119.3 at the -27% fib take profit level.
  

• But since this TP still puts price within the channel mid point range, the ultimate TP of interest is 21,887.9 at the -61.8% fib level.