The majority cannot find the set-ups that yield the highest probability of success for them, especially in a high-volatility market. They fail to grab perfect entry and exit points and usually get lost in the noise of the market. This could lead to inconsistency and huge losses, especially in sectors that show extreme volatility along with potential, such as semiconductors.
Overcoming these challenges basically comes down to a solid, actionable trading plan that’s focused on high-probability setups. So, having a proper understanding of the market structure along with tools at one’s disposal—such as technical analysis and volume analysis—you should be able to sift through the noise and capitalize on meaningful trends. For the upcoming week, my trading plans intend to revolve around the semiconductor sector, particularly Nvidia, along with other stocks and ETFs that have shown great directional potential.
Below is an article and video where I outline my best high-probability swing trade setups for the week and go in-depth into how I plan to execute and manage each of these trades. I will break down my strategy on how I’m going to approach Nvidia and the Semiconductor ETF, explain the logic behind why I’m setting up shorts, and extend additional trading ideas that should present a fantastic opportunity in the coming days.
1. Nvidia (NVDA) Swing Setup: Targeting Lower Highs for Short
Rationale:
Nvidia remains one of the hotspots within the semiconductor space in light of the recent high gut-wrenching action over the last couple of weeks. Nvidia had a strong uptick last week, managing to capture a bounce from the low $120s up to the high $120s. It is currently positioning for probable downside. This setup focuses on finding lower highs within a 15-minute period and taking advantage of the likely continuation of the downtrend.
Key Levels:
- Entry: I am looking first for a lower high in the 15-minute chart, around a failure zone of $125-$126. That’s an important level of resistance where I am going to seek weakness.
- Stop: The stop-loss should be placed above the most recent lower high to minimize risk in case there is a break above that level; such would invalidate the trade.
- Target: My targets are a breakdown below $123, taking partial profits perhaps as the stock moves into the $120 area. The ultimate target lies near $115, where lies the key support zone. I will trail my stop to lock in the gains during the course of this trade.
Why It’s High Probability:
It still has more downside potential with Nvidia’s overall technical structure and sector rotation. Relative weakness by Nvidia compared to the other big tech giants, such as Amazon, Meta, and Tesla, implies that the sellers might prevail in the short run.
2. SMH (Semiconductor ETF) Fake-out Breakout and Trend Reversal
Rationale:
Below, Nvidia’s price action is very highly correlated with the Semiconductor Sector ETF, SMH, making the latter indeed a great proxy for the broader semiconductor space. Last week, SMH had a failed breakout above $263 and quickly back into range, showing that sellers are still active. This sets up a high-probability short trade with lots of potential downside if the trend continues.
Key Levels:
- Entry: The setup is shorting against the $265 high from Friday’s session. If the ETF shows continued relative weakness and fails to hold above multi-day support at $257, I’ll be adding to the position.
- Exit: The stop-loss will remain above the $265 level, ensuring that I will be out if this ETF convincingly breaks above this resistance.
- Target: My first target is the $250 area, where I think there should be some locking of profits. On re: weakness, stops are trailed lower for further profit taking at the $240 area.
Why It’s High Probability:
If anything, the failed breakout over $263, then returning back into the range, is a classic setup to suggest that sellers are still in control. Underperformance relative to other tech areas simply helps confirm that semiconductors—and SMH—may be in store for higher selling pressure over the upcoming days.
3. Arm Holdings (ARM) – Lower Highs to Watch For
Rationale:
While Nvidia and SMH are the most interesting swing trades this week, Arm Holdings provides another high-probability short setup. The stock has been making lower highs on the daily chart and has started showing shifts in momentum. Not a priority setup, but any who want to diversify in the semiconductor space can keep it on the radar.
Key Levels:
- Entry: I’ll be looking to play any bounce into resistance around the former lower high on the daily chart with entry near the $50 level.
- Close: The stop-loss will be placed just above the previous day’s high to minimize risk.
- Target: It would reach the first target of a drop back into the mid-$40s, and if selling accelerates, a potential move down to the low $40s.
Why It’s High Probability:
It has also built a well-defined pattern of lower highs, and volume is drying up, so there could be more downside action in the stock. The trade is more favorable since ARM has been relatively weak compared to other semiconductor names.
4. More Trade Ideas: FFI, MLGO, DJT, XLE
FFI (Faraday Future Intelligent Electric Inc.): Setting Up Short For Meme Stock
Rationale:
FFI was running with the meme stock mania and is showing its first signs of exhaustion. If we see a second push above last week’s highs, I’ll look for a hard intraday failure to short. The speculative nature within this stock sets up for sharp reversals, offering high-probability short setups for swing traders.
- Entry: Look for a pop into resistance near $60 with failure signs.
- Target: The initial target is the mid-$40s, but it can drop to the $30s upon loss of momentum.
MLGO (MicroAlgo Inc.): Change of Character
Rationale:
Surprisingly, MLGO had a good run last week without many knowing what hit them as traders. We have started to see a change of character with increased selling pressure. I’ll look for a breakdown of Friday’s support, coupled with volume confirmation, as the cue to initiate a short position.
- Entry: Weak below weakness, intraday VWAP offers a good risk/reward skew for the continuation of the downtrend.
- Target: Mid-to-low $20s, depending on the strength of selling.
DJT (Dow Jones Transportation Average): One-Day Momentum Short
Rationale:
The DJT has shown significant selling pressure, and I’m eyeing a short setup if it bounces into key resistance near 36. The idea here would be for a failed bounce to set up a sharp intraday reversal.
- Entry: Sell short against $36 with a close stop.
- Objective: Quick intraday profit of around $34++, depending on market conditions.
XLE (Energy Select Sector SPDR): High-Time Frame Setup
Rationale:
XLE has shown strength and is setting up, potentially for a longer-term swing. This isn’t ready for immediate action, but I’m watching closely for a breakout attempt and a possible move back into key resistance zones.
- Entry: Should be on a breakout and reclaim of key moving averages.
- Objective: Higher time frame trade with a target in the $85 range.
Conclusion
Led higher by Nvidia and SMH, semiconductor setups are presenting some attractive, high-probability trade opportunities this week on both the long and short sides. By focusing on lower highs, failed breakouts, and key support levels, these trades offer excellent risk-reward opportunities.
In addition to these setups, other names ARM, FFI, MLGO, and DJT provide additional miscellaneous opportunities for those traders seeking high-probability swing setups. These trades have disciplined risk management and the clearest understanding of the market conditions. This simply sets them up for powerful returns which might be realized later on in the week ahead. Again, always stay in and adapt to new opportunities.