Today, the contract on the Index is up, along with most global stocks, after China on the positive side. However, economists still predict a terrible first quarter for the world's second largest economy – the worst in three decades.
In the United States, New York City, home to Wall Street, has become the pandemic epicenter of the world. In the largest economy in the world, more than 164,000 people are already infected across the country, with more than 3,000 dead.
There is no sign that we are closer to finding a COVID-19 vaccine, despite the ubiquitous news hype that countless scientists are on the verge of breakthrough. The world's leading experts have been working on an HIV vaccine for more than 30 years, but there is still nothing to prove.
The outlook continues to look bleak. Analysis of the charts clearly illustrates how fundamental issues are reflected in the technical aspects: despite short rallies, the downward trend remains firmly in place.
Yesterday, they failed to post higher than Thursday's highest, leaving the gauge trapped in the descending channel, forming the declining peaks and troughs confirming a downward trend.
On the other hand, both the MACD and the RSI are preparing for a rally. These conflicting signals can generate significant volatility before determining a direction. We bet on price, with the peaks and troughs falling within the descending channel.
That means we rely on sale, not rallies, to determine where the stock is expected to continue.
Trading Strategies
Conservative traders are likely to wait for the MACD and RSI to catch up. with the bearish pad for the price before risking a short position.
Moderate traders need confirmation that the rally will be topping from March 23, as with a long red candle, below the channel top.
Aggressive traders can fall short at will, according to risk aversion and trading plans.
Trade Example – Short Position
Entry: 2,625
Stop-Loss: 2,650
Risk: 25 points
Target: 2,500
Reward: 125 points
Risk-reward ratio: 1: 5
