Disclaimer: Any analysis you see here is meant for educational purposes and is not trading advice. Any trades or investments made using this are entirely the reader's decision based on their evaluation of the risks and market knowledge.
Recap: It was a great start to the week for us and as expected, the rally continued without much resistance from the bears. Monday's open was right above 4725 and first rallied into 4738 and today it just closed at 4767. Below is what I shared in the weekly plan.
In the last few weeks, I have shared my opinion on not going short unless we see a reversal structure build up and I still hold that same view. I have outlined my long-term scenarios in the weekly post and though I expect a retracement in all the scenarios, I am not going to get in front of this rally to guess the top. My reason is that the structure of the October lows is highly unreadable, the dips are shallow and we don’t generally see 8-week bull rallies. My trades are on the long side but I am keeping good control over the size and taking profits so if there is any rug pull, I am not holding a bag at the highs.
We are now very close to 4800 and per what I shared in one of the posts, if this is wave 5 of the impulse move started in November, then it can potentially go a little above 4800 without violating any rules. 4816 is the line in the sand for this count. Above that, Wave 3 will be the shortest and that’s a violation.
Volume has dipped as we are getting into the holidays and we still have Christmas week to go. Till there is any hard reversal or a violation above 4816, we just continue to trade with the plan and buy any dips.
Trade Plan
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