Trading Plan for Friday, May 10th 2024

Trading Plan for Friday, May 10th, 2024

Market Sentiment: Bullish, but with a cautious undertone after a significant multi-day rally. Expect potential profit-taking and a reduction in aggressive buying activity. A period of consolidation is highly likely.

Key Supports

• Immediate Supports: 5235-37, 5228, 5209 (major), 5203 (major)

• Major Supports: 5177-79 (major), 5155 (major), 5120 (major)

Key Resistances

• Near-term Resistance: 5246 (major), 5268-72 (major)

• Major Resistances: 5302 (major), 5326-28 (major), 5395 (major)

Trading Strategy

• Capital Preservation Focus: After a strong multi-day rally, prioritize protecting your gains. Adopt a defensive posture and consider reducing position sizes.

• Limited Long Opportunities: Due to the overbought conditions and the potential for a pullback, look for very selective long entries if at all. Focus on failed breakdowns at 5228 or 5203 for potential long entries. In the event of a deeper pullback, consider buying dips at major support levels, with 5209 or failed breakdowns at 5203 offering potential opportunities.

• Short Opportunities: While your personal trading rules discourage shorting green candles and breaking trends, monitor back-tests of 5246 and 5268-72 for potential short entries with tight stop losses. Proceed with extreme caution.

• Focus on Levels and Patience: Trade the provided support and resistance levels with strict discipline. Let price action develop, be patient, avoid emotional trading, and prioritize minimizing risk exposure.

Bull Case

• Holding Support: Defending the 5203-5209 zone remains crucial for sustaining bullish momentum. Holding above this level would indicate a continuation of the breakout, targeting 5246, then 5268-72.

• Ultra Bullish Scenario (Unlikely): A parabolic move overnight pushing through 5246 would be required for a continuation without a proper dip. Monitor overnight basing above 5228 and below 5246 for clues about strength.

Bear Case

• Breakdown Signals: A convincing break below 5203 would signal a potential pullback and retest of lower supports. Monitor bounces/failed breakdowns at 5228 or 5203 for potential short entries.

News: Top Stories for May 10th, 2024

Global Stock Market Trends:

• U.S. Market Performance: Modest gains seen in U.S. stock indices, reflecting optimism despite mixed April performance.

• European and Asian Market Dynamics: Positive movements noted in European and Asian markets, driven by solid economic data and central bank easing.

• Impact of Economic Indicators: U.S. labor market easing influences market expectations regarding potential rate cuts.

• Sector-Specific Movements: Technology sector experiences volatility, while energy sector sees potential stabilization.

• Investor Sentiment and Future Outlook: Cautious optimism prevails amid anticipation of rate cuts and easing inflation, alongside geopolitical risks and trade negotiations.

Assessment of Inflation and Interest Rate Policies:

• Global Inflation Trends: Persistent inflationary pressures challenge central banks' efforts to meet targets.

• Central Banks' Stance: Cautious approach towards interest rate adjustments observed globally.

• Economic Implications: High interest rates may slow down consumer spending and business investments.

• Inflation Expectations and Future Policies: Central banks closely monitor inflation expectations to inform future policy decisions.

Impact on Global Economic Stability:

• Corporate Financial Developments and Deals: Companies announce financial results and engage in strategic transactions, reflecting market dynamics and regulatory changes.

• Forward-Looking Corporate Statements: Companies adjust strategies to navigate current market conditions and regulatory environments effectively.