NQ1!, Technical Breakout, Attempt to Establish a Short Term Top

After a consolidation period (a smaller rectangle) the market broke to the upside. This is a good example of a technical breakout when a smaller consolidation takes place before breaking a well established level. That breakout has higher odds to stick. At this point the market is trying to establish a short term top before entering a new consolidation phase. Buy side may start feeling the heat if the price breaches 11660. However, 11600 is expected to be defended on first test. This is a good level to attempt a long. The idea gets invalidated if a strong downside momentum is created, usually by a news, leading to a liquidation move. Until that happen, a potential target remains 11800 with a 11750 hurdle on the way. If you watch traditional indicators like RSI flashing an overbought condition consider the structural breakout more important. Once the top is established, whatever the machine find appropriate, the RSI overbought condition would kick in.

10/11/2020