High Probability Trade Setups

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The US market had 4 trading days last week because of the Presidential funeral. The week started strong on Monday trading to 26000, Tuesday selling day with no trade Thursday and Friday sell off continued and we ended the week at 24388 points.

We are technically at support 24250 points, we have had this support severally this year at 24250. Monday this week looking at the pre-market data we are down indicating the market will seek to open lower and if the support does not hold the DOW could trade down to 23500 points.

This sounds scary but if we take a holistic look, the year started out around 23500 points and it is possible we may end the year around 23500 points support line. Looking at whole picture we do not have a bearish trend what we have is a bearish volatility. Bearish trend and bearish volatility are different things.

The Exponential Moving Averages are in the middle of the candlesticks and if you follow previous post, you would know that we cannot rely on the EMA in a sideways trend. This looks more like a consolidation until we begin to have lower lows. In this case we use the oscillators.

RSI is reacting quickly giving good signals and currently it is back into oversold region. Stochastic and the MACD are heading back down signifying bearish move.

S&P 500 is similar with the same structure on the support which is around 2600.

NASDAQ looks orderly and they are leading the way with Tech stocks selling off. More selloff to come and Facebook and Twitter to expect more selloff. Apple is in a similar selloff. When we hit the bottom, we will have a good buying opportunity.

Coca-Cola (KO)

COKE is done well in October and November rally and pull back to the 20 EMA and a rally and a pull back to the higher low to the 20 EMA. This is a good  bullish setup for about a $1 or approximate.

Trade Set up with an Entry at $49.70, Targets for $51.50 and up to $52.50 with a Stop at $48.80. This is a bullish trade set up and traders can either buy Long calls for January or February 2019, buy LEAP calls for January 2020, buy the stock.

Caterpillar (CAT)

This is an adventurous trade for this week with not a great risk reward, but it is okay all because of the volatility in the market.

Entry is at $122 with a Target of $112 and a Stop at $128. This is a bearish trade setup where Traders can sell short or buy long January or February puts.

Happy trading week and see you soon.

 

 

 

 

 

3 Replies to “High Probability Trade Setups”

  1. Hi, first things first – thanks for these tips on the correct setups to be looking at in trading!

    I notice you use your certain favourite indicators and work forward with your trades with them – my problem is I try to keep things as simple as possible. Considering that – what are your feelings on using Bollinger Bands?

    I only ask as I have great results with them on average, and I find them easy to use. 

    1. Bollonger bands are useful for me to confirm a trade set up

      The Bollinger Bands uses a moving average and standard deviations from the average to show you price reversal points and highs and lows.

  2. Wow, this is some amazing stuff.

    I’ve always wondered what all this means and I’ve even looked around on the internet in the past to try find some information but NOTHING goes into as much detail as you have. 

    I’ve always wanted to go trading and invest my money but was scared I was going to lose it all considering the minimum deposit these days is $200+. Some even ask for $1000 minimum.

    But after reading some of your high probability trade setups I now know what I’m looking for and will choose my decisions accordingly. Thanks a bunch! 

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