As the stock market bull phase drags on, a would-be short seller can look inside market, behind the headline indexes, for signs of weakness. As SPX rotates its way along and NDX benefits from the strength of its big Tech captains (some of which I hold long), maybe some other areas will start to slip.
For example, I noticed this situation in the Cloud ETF and took a shot shorting it. Sure, it’s just a small pattern, but it does have a bearish look to it. It also has a negative divergence by RSI at its recent high (the head of the pattern).
What it has going for it from the bullish side is the proximity above the uptrending moving averages. Also, MACD is reset for more upside (although still trending down since May).
I am just having a little fun poking at something. My tolerance will be the resistance at the 23.35 area. I am not going to play the bull game, holding a short position. So the goal is for a drop to the pattern neckline at 22.25 (bottom of the blue box) and a measured target at clear support at 21. Again, I’m going to stop the loss above 23.35 or 23.50 or so. Meanwhile, it would be fun to hold a position short that actually pays out.
NFTRH+ trade setup ideas are presented for consideration and further research only, not as recommendations. I may or may not personally take positions in all or even most NFTRH+ ideas, as it would depend on my portfolio composition at any given time. “Stop loss” and target levels are usually noted and should be respected.
