Start of A Bull Market?
The Nasdaq officially entered the bull market on Wednesday, March 29, 2023. The Nasdaq-100, has gained 21.9% from its Dec. 28 low meeting the definition of a bull market, which starts with a 20% rise off a bear-market low in 2022. In fact, the market had been on the rise for two consecutive sessions, with the S&P 500 seeing an increase of around 2%, and Nasdaq 100 experiencing a 2.5% rise in just two days. It seems people has start to forget the recent banking crisis.
Pullback Ahead?
Now, I am waiting for some pullback on Friday, March 31. Why? Well, the US Bureau of Economic Analysis is releasing the Core Personal Consumption Expenditure (Core PCE) - the Federal Reserve's preferred inflation gauge - before the market opens. It is the preferred because it excludes the highly volatile food and energy and can make an underlying inflation trend more visible.
People are expecting to see a slowdown in the year-on-year rate but still too high for comfort, it should bring investors back down to earth from the recent high. This will remind investors that the Fed is going to continue increasing interest rates next month. So, we need to be prepared for some minor market correction.
Friday Traditions
You know how it goes - Friday is traditionally known to end up in the red, with short-term traders taking profits. So, I'm planning on engaging in some day trading today. One of the stocks I'm looking at is $Tesla Motors(TSLA)$ Tesla. It typically moves with overall market sentiment, so I'm hopeful that it'll respond accordingly.
Tesla Trading Strategy
Here's what I'm thinking: looking at the one-hour chart below, I can see that the key level for Tesla is around 185 to 186. If the stock opens and sink quickly to around this level and is well supported by it, I'm going to purchase some Tesla stocks directly. My goal is to get a small bounce back to the short-term resistance levels of 196. However, if Tesla goes below 185 and stays below that level, it's likely going to move towards the next support level around 180. I would cut my losses if TSLA goes below 180.
TSLA Hourly Chart
Alternative Trading Plan If Rally Continues
In the event, that the market rally continues instead of a small correction, I will aim to short $NVIDIA Corp(NVDA)$ with the purchase of Put Options around 284, as it goes back into the overbought region with Relative Strength Index above 70 (see day chart for NVDA below). You can check out my post on NVIDIA here: Can NVIDIA Sustain its Bullish Momentum?
NVDA day chart
But, it's important to keep in mind that short-term trading requires close monitoring, and it's not recommended for those who aren't decisive or disciplined. So, make sure you have a well-defined strategy and risk management plan before engaging in any day trading activities.
There you have it - the rundown on the market's recent performance and my thoughts on what's to come. Keep an eye out for that pullback and happy trading!
Thank you for reading, please share what stocks are good for trading today in the comments below.
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