Major Buy Signal in NASDAQ!
The NASDAQ has given a major buy signal. This signal is so strong that it should move the nASDAQ to a minimum of 13,500 and as high as new all time highs.
Why?
Because of a major momentum divergence.
The chart below shows the weekly NASDAQ going back to 2015. You can see the major bear market in 2022. You can also see where it bottomed in October 2022 which I told you about the day after it bottomed.
Now, the situation is very different.
Take a look at the red live on the chart. This line is the Relative Strength Index (RSI). This is a measure of the momentum of the market.
Now take a look at the period of July 2022 to date. You can see that the market made a major low in July of last year. So did the RSI. But now take a look at October 2022. So far, that has been the absolute bottom of the market. But the RSI did not make a new low then even though the price did. It made a higher low.
This is a classic weekly momentum divergence.
When this happens, you should expect a major countertrend move, in this case higher, or a major trend change.
So my first projection higher is about the 50% retracement level and my highest projection is a new all time high.
Momentum divergences are a very powerful indicator of a major trend change and that has happened. Now, our task as traders is to find low risk entry points and to try to hang onto our longs as long as possible.
So how do we make money from this?
Overall, we want to get long and stay strong.
But timing is everything. We need to rely on solid timing models to get us long and to give us a place to put protective stops.
The best place to learn this is from our foundational course Stock Success School. Click here to learn more.
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