QQQ reversed off the top of that April 1st/5th gap support zone that it was highlighted trading at during yesterday’s video. Gaps are like magnets for prices & an obvious target for many traders. So far, the bounce has taken QQQ back to the bottom of what I’ve labeled as my likely ‘bounce target zone’ on the 60-minute chart below. That bounce target zone runs from 332, which is the bottom of the March 7th/8th gap, up to the top of yesterday’s gap around 336, about a 1.2% range.
QQQ 60m May 5th
As such, I am viewing any bounce from current levels in pre-market trading (332) up to 336 as an objective level to add back any short positions closed out at gap support yesterday (or longs taken as a bounce trade there) as well as any new short positions, with stops somewhat above 336, depending on one’s price target(s). I’ve also noted some similarities in the price action as well as the RSI indicator between the recent pullback in the Nasdaq 100 and that of the first leg down in the 12% correction that started back on February 16th (see notes/numbers on chart).
For those that went long at the top of gap support at yesterday’s lows & plan to hold out for additional gains, potentially new highs in the Q’s, a stop somewhat below the bottom of the April 1/5 gap which comes in just above 324 seems objective.