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Return And Risk Equation Is Malísima On Wall Street

The Nasdaq 100 is just 3% from the 16,000 point area, which in addition to being an important psychological resistance coincides with the ceiling of the channel that has been limiting the rises since the middle of last year.

There is the objective that I have repeatedly been pointing out that could be achieved before we witnessed a sung downward correction , which I would not be surprised if it was similar in intensity to the one we saw now a year ago and which led to the main reference North American technology from 12,440 to 10,677 points or what is the same, a 14.50% drop from maximum to minimum.

If this downward correction took shape from the current price environment, it would mean witnessing a fall to the 13,800 area of ​​the Nasdaq 100, which is an environment that is technically very important since it would also coincide with the base of the bullish channel than before. described them and would suppose a 23.60% adjustment of the Fibonacci series of the entire upward movement that was born at the lows of March last year, which were the bottom of the Covid-19. Reaching the 13,800 area would be an unbeatable opportunity to buy a new bag. | Learn about Ecotrader strategies here

For the record that I am not facing the current trend, which continues to be unquestionably bullish, but if we do the risk-return equation at current levels we can see how it is anything but attractive since the potential profit would be 3% , up to the area of ​​powerful resistance of 16,000 points, while the potential risk would be 12%, up to 13,800 points.

It is clear that more than one might think that the Nasdaq 100, with the powerful uptrend that it defines, could end up exceeding the ceiling of its channel at 16,000 points and continue its absolute free rise. Obviously, I do not rule out that possibility but if that happens I am clear that we should enjoy the purchases made months ago and that it would be nonsense to go after prices, as if the world were ending. Above 16,000 points we would be in front of an excess that would take us to an extreme of overbought such that it would invite to buy a helmet.

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