It is unrealistic for most traders to continually find high-probability trades. Despite spending a lifetime of hours researching and analyzing, they may end up on the wrong end of market moves and miss profitable opportunities. When not trading well, frustration breeds decreased confidence and performance.
With fast changes involved in today’s trading environment, one needs to establish access to real-time data and the advanced charting tools required to understand the actions of different trading elements. Traders need reliable platforms that give them insights into market trends and help them formulate strategies according to current conditions. Nevertheless, numerous traders still fail to piece together coherent trading plans that account for the volatility of the market, even with the best tools at their disposal.
To help you ride out these trends, I’m going to outline high-probability trades and the best swing setups for the next week. More in-depth analysis of current market trends and using time-tested strategies will position you to take big directional moves. Let’s dive right into our top picks for the week, starting with Nvidia, the semiconductor sector, and other notable opportunities.
Nvidia: A Top Idea for the Week
One of the best trades to be had for this week is in Nvidia. It’s started to show a failure off of a strong thrust that rallied shares up from the lower end of the $120s into the upper $120s, and I’m seeing this as a lower high continuation short setup. The rally in Nvidia hasn’t kept pace with a broader market rebound and has shown relative weakness that’s likely to continue to express itself in price through further downside.
Entry Strategy
I have already taken a small short position in Nvidia. Now, when it breaks the lows and makes lower highs on the 15-minute timeframe, I will add to that short. Another pop up towards the multi-day VWAP near the 125-126 zone can act as a failure point. When the trend becomes clearer, I will add more risk and keep my stop above the former lower high.
Exit Strategy
If we break below the key support at 123, my near-term profit objective in the stock would be toward 120 to lock in gains as the stock approaches support. My ultimate target is the 115-116 area, where I expect significant buying interest.
Semiconductor Sector: A Broader Outlook
This kind of bearish pattern is also present in the semiconductor sector, as represented by the ETF, SMH. Here, a breakout failure above 263 places it on top of the shoulders of the sellers, whose control might break lower anytime soon.
Entry Strategy
Similarly, I hold a small starter position short in SMH and continue to hope for additional opportunities if we can see a breakdown below its multi-day support at 257. My relative weakness among key names in the sector will also serve as a guide in making decisions.
Exit Strategy
If it breaks down below 257, my first area of interest will be around 250, which is a previous support area. I will look to lock in the profit as we get there and trail my stop to secure the gains.
Other Names to Watch
While Nvidia and SMH are my focuses, there are other setups worth keeping in observation:
Arm Holdings (ARM)
Arm is also forming lower high formations on the daily chart. It is not at the top of the list, but it could be a good watchlist candidate for those wanting to profit from similar bearish patterns.
FFI
FFI has been actively trading on recent meme-driven momentum but may be ripe for a pullback. If it continues to break above last week’s highs, it presents a shorting opportunity against that high, targeting a decline toward the mid to low 40s.
MLGO
So far, MLGO has displayed a signal for the reversal of character after breaking a strong uptrend. I will wait for volume to confirm as it changes trend. If we hold below Friday’s support level with consistent selling, then I will look at selling it short.
DJT
DJT has bounced but might sell out. If it bounces into 36 and fails, a quick short trade may occur.
XLE and XLF: Taking a Step Back
There are opportunities in both XLE and XLF for those looking at higher timeframe plays. Both can be picked up further with the tailwind as earnings approach for major financial institutions and may serve as a potential reclaim of key moving averages.
Conclusion
So the focus this week will be to, as much as possible, stay on high-probability trades and keep prime swing setups facing market volatility. With my primary emphasis on Nvidia and the semiconductor sector, plus additional names like Arm, FFI, and MLGO, you have a decent choice of opportunities.
Remember that good risk management is paramount. Be prepared to switch strategies as market conditions fluctuate, and watch out for new setups that arise during the week. The more disciplined you are and the more informed you remain, the higher your chances of making profitable trades will be, thus improving your overall performance as a trader.
