TRADE SETUP ALERT 22/10/2020

Brent Crude Setup

Keep an close eye on the diagonals: Brent crude has been consolidating in a large symmetrical consolidation for the last two weeks and have in the process formed clear diagonal boundaries with a break above 43.50 opening up the way to a healthy full target near the Monthly R1 Pivot @ 45.66 (which is also the Inverted head and shoulders target).

Today has seen another succesfull re-test of the lower diagonal boundary where it met up with the 4H 200 SMA and Yearly S2 Pivot @ 42. Should price find support at the Monthly Pivot @ 42.55 the bulls will likely step in and buy price higher. If however price were to break back below 42, the first short target and area of support would be @ 41.04

NASDAQ Setup

The NASDAQ 100 has seen a strong pullback towards the 4H 100 SMA to re-test the inverted head and shoulders neckline. This is a major area of support with the Weekly S1 Pivot converging right on the neckline and the Monthly Pivot directly below. This would therefore certainly be considered a final line in the sand in terms of medium term trend direction.

Currently price is still struggling to find support and needs to stay above the Monthly Pivot @ 11500 in order to catch a bid. Targets to the upside should price manage to break above 11800 could see the full inverted head and shoulders target realised near 12500. It’s worth noting that the upcoming elections and stimulus will have a large effect on the outcome and more consolidation until then is a distinct possibility.