Before I look at some other individual stocks, I want to look at the progress of the NASDAQ Composite during this recent Trump Rally. Technology was late to join the party. Money came out of these sectors and high flying stocks to buy other beaten-down and unfavorable sectors. After everything else seemed overbought, investors finally began to reach for the beaten down technology stocks again like Facebook, Apple & Alphabet.

NASDAQ Composite

This first chart is a 2 year weekly candlestick chart to analyze the current uptrend from an Elliott Wave perspective. If this rally is going to reach my previous target of 5,800, I would expect the market to rally into the new year something like I’ve illustrated. From a candlestick pattern perspective, a 3 White Soldier candlestick pattern I feel is needed to reach that 5,800 upside target.

Using a Fibonacci Extension Tool to Measure the Uptrend’s Golden Ratio

During a powerful Bullish Impulse wave pattern, you anticipate that the price is going to reach the Golden Ratio, or the 161.8% Target Line from the Fibonacci Extension Tool.

If this powerful Bullish Impulse wave pattern is developing, expect a push above the black 100% Target Line from a long-term Fibonacci Extension Tool. The trade for this pattern would be selling as high above the 5,550 area as possible and then looking to re-purchase those sold shares when the index pulls back to the black 100% Target Line. Hold the shares until the final destination of 5,800 is reached.

NASDAQ Composite – 5,800 Confirmed?

This is a 3 month daily candlestick chart where I noticed that today’s price action produced a gap-up, or a Rising Window candlestick pattern. Does this gap-up help to support a strong move higher? It sure seems like it to me.

I placed a Fibonacci Retracement Tool on the chart and placed the gap up at the 50% level of the tool. Using this alternative price projection method, I come up with a potential 5,800 target level at the Golden Ratio area.

Using a Fibonacci Retracement Tool to Estimate an Upside Target Price

In a strong uptrend, a Rising Window typically develops in the early or no later than the middle stages of a Wave 3. Therefore by placing the 50% Retracement Line from the Fibonacci Retracement Tool can give you an estimate of the “safer” trade to the upside. There is always potential for a “throw-over” move as well for those wanting to try and maximize gains.

The daily MACD Histogram reflects increasing buying momentum, a bullish indicator. This appears to be confirming a continued upwards trend in the short-term.

NASDAQ Composite – Summary

The NASDAQ Composite is continuing its stellar run, and we have a roadmap above of how I think this is going to continue to play out. According to the timing, starting to lock in gains around the POTUS inauguration seems to be the trade setting up. This will be monitored and I will try to notify members as soon as I see something else developing.

For now though, the immediate watch is how the index finishes next week. If a close above 5,550 doesn’t’t happen, then expect an update on the chart activity. Until then, keep calm and carry on.