Score 8.6 (out of 10): NASDAQ 100 E-MINI sets up for +7.6 rally in 3 months

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What’s Going On Here?

Tech stocks have been on the backfoot this week as the Fed has become more hawkish, threatening to increase the cost of capital. Many tech firms depend on cheap financing to support their growth projections, hence higher costs are seen as a negative – if the Fed is right to be hawkish, at this point of the economic cycle.

Why Now?

NASDAQ 100 E-MINI has triggered a new high volatility signal (1 month). During similar occasions, NASDAQ 100 E-MINI had a median return of +7.6%, over the following 3 months – based on 10 historical occasions with 9 of those showing positive returns (90%). This buy signal for NASDAQ 100 E-MINI received a high score of 8.6 (out of 10). This insight was generated on 2021-December-17 with last price of 15,717.

What’s This Company About?

NASDAQ 100 E-MINI is the benchmark index for the key 100 market cap based tech companies. Based on the last 2 years’ risk/return profile, this asset is seen as Less Risky.

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 16911.56 (+7.6%) 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 14907.82 (last price at 15717.32), which is equivalent to a -5.2% 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:

3.5% (February-2020), 25.2% (December-2018), -2.5% (October-2018), 12.1% (April-2018), 6.2% (February-2018), 5.1% (June-2017), 5.1% (January-2016), 11.6% (August-2015), 9% (October-2014), 11.3% (April-2014).

Historical Chart:

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Summary:

NameNASDAQ
ViewUp
Star (1 to 10)8.6
Target+7.6%
Time3 months
Hit Rate90%

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