Technical Analysis. Nasdaq 100, |
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Highlight Investments Group |
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January 25st, 2004
Our index options trader traded QQQQ options for this week’s “best trade of the week”, but could instead have traded NASDAQ 100 index shares or options using the same method. This trade was based on our volume indicators and our Market Commentary.
NOTE: We discuss our “best trades of the week” here mainly for educational purposes. We don't recommend that you follow our exact trades. Instead, we urge you to develop your own trading style and to paper trade before committing your money to real trades. Our volume analytics will help you do this.
| Security | Return |
| Put #1 (QQQQ March) | +21.43% |
| Put #2 (QQQQ March) | +30.77% |
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Total Profit: |
+$4,200 |
Even though the trades shown above were not entirely without risk, they resulted in a profit of $4,200
In the following, we would like to show you the motivating factors that led us to take above trades. For this purpose, we have created what we call a 'Table of Trade Motivators':| Trade | Volume Motivation | Market Commentary on Members Home Page during the trade |
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Buy Put #1 01/08/2004 |
After 13:00 despite the large amount of resistive volume the market continued moving higher throughout the rest of the day, moving the major market indexes to new highs by the end of the day. | The fact remains that there is a large amount of accumulated resistive volume for which the market has yet to react. Because of this we still expect that the market may move lower in the short-term as it should have a short-term pullback in order to account for the large amounts of accumulating resistive volume. |
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Buy Put#2 01/9/2004 |
By 12:15 the largest resistive VMA spike of the day peaked. | We still believe that the market may continue its pullback in the resistive volume to the upside. |
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Sell Put#1,2 01/13/2004 |
During this descent, the market encountered a moderately large amount of supportive volume to the downside, which was focused into two peaks: a moderate supportive VMA spike at 10:30 and a large supportive VMA spike at 12:00. The | The mid-term market is quite bullish and is likely to continue on its current uptrend. |
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Buy Put #3 01/15/2004 |
During the market's late morning and early afternoon advance it ran into a very large resistive VMA spike to the upside. This resistive volume spike began at 11:30, but quickly came to a peak at 12:45. | The fact that the market has not reacted, in the short-term, to the accumulating amounts of resistive volume to the upside leads us to believe that there is now a chance for there to be a mid-term correction, not just a short-term correction. |
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Buy Put #4 01/16/2004 |
Intraday, a large and broad resistive VMA spike to the upside was seen at 12:45. This spike was substantially bigger than any seen in quite some time. | The fact that the market has not seen a pullback in this situation leads us to believe that a more substantial correction may be in the offing. |
The principles discussed above also apply when trading the NASDAQ 100, the S&P 100, the Dow Jones, as well as other indexes.
Following
is a detailed list of the actual trades made by our
investor.
These are the trades which netted the returns shown
above:
|
Date |
Trade | Strike | Expiration | Contracts |
Contract Price |
Amount | Profit |
| 01/08/2004 | Buy Put #1 | $38 | March | 60 | $1.4 | -$8400 | |
| 01/13/2004 | Sell Put #1 | $38 | March | 60 | $1.7 | +$10200 | +$1,800 |
| 01/9/2004 | Buy Put #2 | $38 | March | 60 | $1.3 | -$7800 | |
| 01/13/2004 | Sell Put #2 | $38 | March | 60 | $1.7 | +$10200 | +$2,400 |
| 01/15/2004 | Buy Put #3 | $38 | March | 60 | $1.25 | -$7500 | |
| 01/16/2004 | Buy Put #4 | $38 | March | 60 | $1.15 | -$6900 | |
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Total: |
+$4,200 | ||||||
To see any of our past best trades, simply select from the list below.
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QQQQ Trading System QQQQ, SPY and DIA trading signals for conservative mid- and long-7 term traders ...
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