Trading Plan for Tuesday, May 14th 2024

Trading Plan for Tuesday, May 14th, 2024

Market Sentiment: Bullish, but cautious given the 8 consecutive green days. The risk of a sudden pullback increases as the market becomes more overbought.

Key Supports

• Immediate Supports: 5235 (major), 5221-17 (major), 5210 (major)

• Major Supports: 5192 (major), 5174-76 (major), 5144-47 (major)

Key Resistances

• Near-term Resistance: 5246 (major), 5262 (major), 5272 (major)

• Major Resistances: 5302 (major), 5327-29 (major), 5400-05 (major)

Trading Strategy

• Chop Zone Management: The 5235-5262 zone is a chop area, making it difficult to trade with high conviction. Avoid overtrading and focus on level-to-level scalping for small gains.

• Long Opportunities: Look for failed breakdowns at 5235 or 5210 for long entries. Prioritize reactions at these levels, ideally with quick recoveries. In the event of a deeper dip, consider knife-catches at 5192, 5174-76.

• Short Opportunities: As always, avoid shorting green candles and breaking trends. For those inclined to counter-trend shorting, consider 5272 or 5302 as potential levels, but proceed with extreme caution.

Bull Case

• Uptrend Continuation: As long as 5235 holds (or any breakdown is quickly recovered), the bullish trend remains intact. Focus on a potential base building within the 5235-5262 range, followed by an upside breakout targeting 5272, 5290, and ultimately 5302.

• Ultra Bull Case: No dip below 5235, with continued basing above it. Reclaiming 5245 could be a signal to add exposure, but only with acceptance and no break above 5262.

Bear Case

• Breakdown Signals: A convincing break below 5235 would trigger a potential correction. Monitor bounces/failed breakdowns at 5231, 5221-17, and 5210 for short entry opportunities, but prioritize a more significant level like 5192 for confirmation and to avoid traps.

News: Top Stories for May 14th, 2024

China's Strategic Bond Sale: China initiates a substantial bond sale, aiming for $140 billion to combat its property crisis and stimulate economic growth through infrastructure projects.

Russia's Economic Resilience: Despite Western sanctions, Russia's economy shows unexpected strength, with GDP projected to outpace the U.S. This resilience is attributed to increased non-oil revenues and strategic fiscal management.

Indonesia's Nickel Boom: Western car manufacturers are flocking to Indonesia for its nickel resources, crucial for electric vehicle batteries, highlighting Indonesia's growing importance in the global EV supply chain.

Meme Stock Mania Returns: The meme stock phenomenon resurges, with GameStop and AMC Entertainment experiencing significant price volatility following social media activity by influential traders.

Global Economic Concerns: Leaders from Serbia, North Macedonia, and Georgia express apprehensions about the requirements for joining international economic communities, potentially impacting regional economic policies.

China's Bond Sale and Global Implications: China's upcoming bond sale aims to bolster its economy and could influence global interest rates, foreign exchange markets, and international bond market dynamics.

Meme Stock Resurgence and Market Volatility: The return of "Roaring Kitty" to social media sparks a renewed frenzy in meme stocks, leading to dramatic price swings in GameStop, AMC, and BlackBerry.