10/20/2018 Markets flat this week. Looks like a trend reversal, but still good to average in here. Discussion of QQQ, FB, MU, BABA, and SSEC (Shanghai index).

Hi everyone, I hope you all had a great week.  

Above is QQQ on the daily chart.  Notice that this is the first time it’s had an RSI reading clearly below 30 in the last 2 years.  That represents the possibility of a long-term trend reversal which I’m still favoring.  Either way, if you have cash, now would be the time to consider buying a little.  

On the weekly timeframe, QQQ has broken down from a 2-year uptrend line on high volume.  This trend line break is following an RSI divergence, meaning the index made higher highs, but the RSI indicator did not.  I think we could see the low 160s or high 150s in the next 2 months. 

Last week we discussed MU on the monthly chart and noted that it looks like it will retest the high 20s or low 30s.  MU is currently testing a key support level at 40 and would be a good place to buy for a quick bounce as well as a long-term hold.  I’m still avoiding MU because I believe it will go much lower in the next 6 months. 

Above is MU on the weekly chart.  MU is trying to hold onto a key support level here.  If we see impulsive selling in the next few weeks, this will confirm the new downtrend.  

Here’s the weekly chart of BABA.  Although I don’t think we’ve found a bottom yet, buying shares now and in the 110-120 range seem like good choices for long-term investors. 

Facebook (FB) looks like a great purchase here in the 150s for the long-term investor.

Here’s the SSEC, which is the Shanghai Index.  The index has broken through a key support zone but also has bullish RSI divergence.  Notice how the price has made lower lows, but the RSI indicator has made higher lows.  This suggests we are forming a bottom here.  Generally, global markets are correlated, so if one market starts recovering, other markets will follow.  

I hope to see you all next week!