The set-up: With the market at all-time highs – record closes on the Dow Jones Industrial Average, the Standard & Poor’s 500, the Nasdaq Composite and the Russell 2000 for two days in a row – you might think there’s not much more room to run to the upside without a breather.
There’s no denying that things are getting extended across the board and there aren’t many good set-ups out there, but the market is the master and it tells us what it is going to do and right now it says the Nasdaq is making a fresh breakout.
The chart shows a purely technical trade here – in fact, it could have been made Tuesday – with the Nasdaq breaking through 6,500. It measures up to 6,700 – and with the Relative Strength Index at reasonable levels, there is enough oomph to get it there — and the risk is back down to support at 6,400. That means you have up to 200 points on the upside, and 100 points on the downside, and that’s a risk-reward worth considering at a time when there aren’t many favorable opportunities.
The play: The PowerShares QQQ ETF (QQQ) is the obvious pick here – with stops set at the 6,400 level for the index — but you could also add some juice to this trade using your favorite leveraged ETF on the Q’s. My RagingBull colleague Jeff Bishop of TopStockPicks.com favors the PowerShares UltraPro QQQ (TQQQ) for this kind of trade on the Nasdaq.
Jason Bond runs JasonBondTraining.com and is a swing trader of small-cap stocks.
You may also like
Exclusive System Tracks Wall St. Insiders
“Dollar Ace Simply Exposes Information That Wall Street Wants To Keep Quiet” Said Kyle Dennis
“One member, Wesley M., has already reported 360%+ gains in just a few short days. Don’t miss this!”
(Reserve Access Now)
“What Recession?!” Jason Bond nets $55,060 in realized profit in One Day
After going 6 for 6 on profitable trades recently, we caught up with Jason to ask how he did it.
Check out Jason’s exclusive interview revealing this tightly guarded strategy. (Watch Now)
RagingBull.com Co-Founder, Jeff Bishop, Launches High Conviction Trade Service
“We listen to our clients and we give them EXACTLY what they want, so we designed a service to deliver 1 trade, 1 time a week, with a 100%+ PROFIT TARGET, directly to your inbox every Monday before the market opens. (Read More)