Score 7.8 (out of 10): NASDAQ 100 E-MINI poised to rally +7.3% rally in 3 months

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What’s Going On Here?

Earlier this week, Federal Reserve Chairman, Jay Powell, has indicated a faster ‘taper’ of the Fed’s stimulus program which might imply higher cost of borrowing rates as the Fed’s bond buying program has kept interest rates low. Longer duration assets, such as technology companies, tend to perform best when interest rates are low or declining. In addition, the new omicron virus has hurt risk sentiment, causing a correction in risk assets.

Why Now?

NASDAQ 100 E-MINI has reached a new shorter-term low. Previously, during similar occasions, NASDAQ 100 E-MINI shares had a median return of +7.3%, over the following 3 months based on 10 historical occasions with 9 of those showing positive returns (90% hit ratio). This buy signal for NASDAQ 100 E-MINI received a high score of 7.8 (out of 10). This insight was generated on 2021-December-1 with last price of 15950.

What’s This Company About?

NASDAQ 100 E-MINI is a tech focused index. Based on the last 2 years’ risk/return profile, this asset is seen as Less Risky. Ticker symbol: NQ.

What’s My Risk / Reward and Time Horizon?

We found 3 months to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 17121.45 (+7.3%) has been reached. Based on NASDAQ 100 E-MINI’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 15304.8 (last price at 15950), which is equivalent to a -4% decline.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ shown under (2), etc. 

Previous episodes:

10.4% (August-2021), 11.2% (May-2021), 6% (February-2021), 15% (September-2020), 6.2% (February-2020), 5.9% (August-2019), 1.8% (May-2019), 13.8% (December-2018), -13.5% (October-2018), 8.5% (June-2018).

Historical Chart:

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Summary:

NameNASDAQ 100 E-MINI
ViewUp
Star (1 to 10)7.8
Target+7.3%
Time3 monthS
Hit Rate90%

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