Note: This post is written for my personal trading record purpose only, so this should not be taken as any form of investment advice or guidance to follow. Discussion is welcome, while you must do your own research for our own risks.
Discussion
The market has been rebounding strongly and extending for more than a month. However, underneath the strong movement in Nasdaq index driven mainly by the recent uptrend of NVDA, other names including the DJI has topped and dropping sharping from 20th May. The S&P 500 is also getting down to the 20MA with near average volume after topping and moving sideway from 15th May.
On 30th May, in the big names of Nasdaq, MSFT is breaking the 20MA with some strong volume expected by the trading day. Other names are moving sideway with NVDA being strong and consolidating around the recent historical.
The entry into SQQQ is a speculative play against the QQQ to capture if there is any sell-off or stronger consolidation around the recently high. Meanwhile, it is observed that the interest rate level increases as the 10Y yield TNX touching 4.638 before coming back slightly after the GPD deflator release.
As this is a speculative play for local top, we would try to keep the stop-loss tight to limit the risk exposure. As we have entered the short using the leveraged -3x SQQQ, we would derive the appropriate stop-loss using the 10MA of QQQ, which is less than 0.3% above the current price when writing. Therefore, we try to limit the loss by 1% of our entry position.
Meanwhile, the tight stop-loss in MP Materials Corp. is confirmed to be a sensible and effective one as MP breaks down into the 50MA line in high volume in the next day.
Setup Summary
| Date | Ticker | Action | Reference | Reference Price | Justification | Position | Price | Size | Stop Loss | Risk Tolerance | Risk Exposure% | Risk Exposure$ |
| 30/5/2024 | SQQQ | Entry | 10MA of QQQ | 9.76 | QQQ breaking down 10MA | 1300 | 9.815 | 12,760 | 9.71685 | 10MA-1% | -1.00% | -$127.60 |
My Personal Trading Record :
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