Trade of the week: short Nikkei 225
Since the Nikkei 225 uptrend is beginning to show signs of fatigue we would like to short it with a stop loss above its record high at 37,005 and a downside target around the 34,000 mark.
(AI Video Summary)
Previous S&P 500 and Volatility Index trading outcomes
In this week's "Trade of the week", Axel Rudolph talks about his recent trade experiences and shares his thoughts on upcoming trading opportunities. He starts by discussing a trade he made with the S&P 500 index. While he missed the chance to enter at a lower price, he mentions that if someone got in early, they could have made a profit as the trade has been moving up towards a new record high. He believes that the trade still has potential to grow, which means there may be more profit to be made.
Next, he talks about a trade he made last week with the volatility index, which has also been performing well. He suggests two options for managing this trade. One option is to cash in profits when the trade hits a resistance level. Another option is to let the trade continue and move the stop loss level to break even or the lowest point the trade has reached. This will ensure a small profit, even if the trade reverses its direction.
This week's trade opportunity
Rudolph notices that while US markets have been doing well and reaching new all-time highs, the same trend is not seen in the Nikkei 225 index. He believes that a corrective move may be starting, especially towards the end of February. Based on this observation, he suggests going against the trend and shorting the Nikkei 225. He anticipates a break in the trendline and a retracement back towards the highs seen in November.
The trade idea is to go short on the Nikkei 225 with a tight stop loss above the current record high. The downside target for this trade is around the previous November highs. Rudolph shares this idea in the hope of catching a potential downward move in the Nikkei 225.
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