ABCD Pattern: Spot Trend Reversals with Ease
US stocks shake off geopolitical flare-up to finish flat.
$NVIDIA Corp(NVDA)$ Q3 results beat expectations yet it still seems not enough for the market.
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Market recap
US stocks slumped in the morning after Ukraine’s missile strikes on Russia, but managed to pare those losses by the close. The $.SPX(.SPX)$ and $iShares Russell 2000 ETF(IWM)$ barely broke even, while the $.IXIC(.IXIC)$ posted a small loss. Energy stocks were a beneficiary of rising geopolitical tensions in Eurasia, even as $WTI Crude Oil - main 2501(CLmain)$ retreated.
Most Magnificent 7 stocks cooled off after Tuesday’s big gains, with $NVIDIA Corp(NVDA)$ down 0.8% ahead of its much-anticipated earnings report.
$NVIDIA Corp(NVDA)$ reported Q3 earnings results, beating expectations with data center revenue hitting $30.8 billion, surpassing the anticipated $29.1 billion. Overall, revenue reached $35.1 billion, exceeding the $33.2 billion forecasted by Wall Street. Despite the strong results, Nvidia's fourth quarter forecast of $37.5 billion, slightly above the anticipated $37.1 billion, was not enough to stir up excitement in the chip stock.
Crypto stocks experienced a widespread rally.
During the trading session, $Bitcoin(BTC.USD.CC)$ soared past $94,000, setting a new all-time high. MicroStrategy rose over 10%, while MARA Holdings jumped more than 13%. "Bitcoin whale" MicroStrategy (MSTR) surged over 10%, with its market cap surpassing $100 billion.
Most popular China concept stocks also saw gains, with the $NASDAQ Golden Dragon China Index(HXC)$ closing up 1.44%. $KINGSOFT CLOUD(03896)$ soared over 42% after Kingsoft's Q3 2024 earnings significantly exceeded market expectations, driven by revenue growth from $XIAOMI-W(01810)$ , the Kingsoft ecosystem, and increased demand from AI-related clients.
With favorable policy winds expected to persist, China A-shares are likely to continue their upward trend. On the allocation front, brokerages are generally optimistic about technology growth and dividend assets. Additionally, themes like mergers and acquisitions and market capitalization management are generating significant interest. Currently, a barbell strategy may be a sound choice, balancing between large-cap value high-dividend stocks on one end and small-cap growth stocks on the other.
ABCD Pattern: A simple harmonic pattern to identify potential reversals
The ABCD pattern is simple, practical, and highly actionable, making it a favored choice for both novice traders and those with some experience. This widely recognized trading strategy is employed by numerous traders.
Remember, in the stock market, the trend is a trader's only friend.
A: The ABCD pattern begins with a strong upward trend. Buyers actively purchase stocks from point A, driving the price to new highs at point B.
B: Early investors start to cash in their profits, leading to selling pressure that causes the stock price to decline.
C: After the price retraces to a certain level, it finds support and stops falling, indicating a potential entry point. At this stage, we plan our trade by determining stop-loss and profit target levels.
D: Set a price to buy between C and D, where D represents a price level between B and C. Look, the closer the price is to point C, the lower the risk involved.
Stop-loss and take-profit are critical factors in trading, almost as important as confirming trends and determining entry/exit points.
Stop-Loss: Set the stop-loss just below point C. If the stock price drops below point C, accept the loss and exit the trade.
Take-Profit: As the stock price rises, reduce your position by half at point D and raise the stop-loss to the entry point (break-even).
This structured approach can help you navigate trades with greater confidence while managing risk effectively.
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Comments
appropriate suggestion of the investment. maybe invest with the help of ABCD mode is a good way for risk-hate peopel….
Ok bagus