Current Nasdaq Futures Price: $20,558 (+2.1% from Friday's close)
Nasdaq futures are bullishly positioned today following moderately positive news from the weekend’s US-China trade talks. The optimistic sentiment has investors seeking opportunities to "buy the dip" rather than anticipating a bearish reversal. With a favorable geopolitical backdrop, the tradeCompass today underscores strategic entry points leveraging volume profile and VWAP indicators.
Educational Insight: Volume Profile and VWAP
Volume Profile: Volume Profile visually represents trading activity at specific price levels, revealing where significant trading volume occurred. The Point of Control (POC) highlights the price level with the highest traded volume, often serving as strong support or resistance. The Value Area (VA), comprising approximately 70% of trading activity, indicates prices viewed as fair value by market participants. Traders use these zones to identify high-probability trade entries and exits.
VWAP (Volume Weighted Average Price): VWAP shows the average price at which transactions occur throughout the trading day, adjusted by volume. Acting as a benchmark, prices above the VWAP signal bullish strength, while those below suggest bearish pressure. Traders often look to join bullish trends on pullbacks toward the VWAP or its standard deviation bands, as it reflects a fair market valuation supported by volume.
Considering today's bullish bias, traders could target the following support levels:
$20,450 - Today's POC & Semi-Round Number: Offers even stronger support due to high accumulated volume and psychological significance.
$20,327 - May 8th Value Area High: Deep pullback level providing excellent bullish re-entry potential if reached.
Should bullish momentum continue, traders may aim for these price levels:
$20,725: Further bullish target corresponding to the January 13 pivot low, achievable with sustained buying.
Bearish Reversal Scenario (Lower Probability)
A decisive bearish signal would be two consecutive 30-minute candle closes below $20,300. Such a move would invalidate today's bullish scenario.
tradeCompass Summary
Strategic Entries: Look to buy dips around volume-supported key levels ($20,495, $20,450, and $20,425).
Caution Point: Monitor the critical $20,300 level closely as a bullish-bearish pivot.
Utilize Volume Profile to pinpoint market-validated fair value zones.
Always remain adaptive, setting stop-losses and adjusting positions if the market narrative changes.
Disclaimer: Use this analysis as orientation. Always trade at your own risk, using a disciplined strategy tailored to your risk tolerance and trading style.
This article was written by Itai Levitan at www.forexlive.com. Read More Details
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