QQQ Topping Setup

Buyers are facing strong resistance & today's trading is a warning sign of exhaustion, not yet a decisive reversal, but the setup leans bearish unless bulls break out cleanly above $598 - risk leans toward a pullback

• RSI/Stoch show overbought, flashing risk of pullback
  
• MACD is still bullish, but losing strength
  
• Today's gap up rejection confirms sellers are active at resistance
  
• This paints a picture of a topping setup unless neckline holds strong
  

The gap up was a bull trap where buyers pushed early, but sellers overwhelmed

• Today’s candle acts as the confirmation signal of a double top (shooting star/bearish engulfing), is a textbook bearish signal at Top 2, which suggests bulls are losing steam & bears are pressing harder
  

This creates a bearish gap + reversal setup
1. Bearish Signals

• Shooting star (small body, long upper wick), rejection of higher prices
  
• Bearish engulfing (large red candle fully covers prior green), sellers taking control
  
• Doji at highs (indecision), often precedes reversal when overbought
  
• Evening star (3 candles & strong green, then doji, then strong red), top formation
  
• These confirm the double top pattern if paired with rejection volume
  

2. Bullish Continuation

• Hammer (small body, long lower wick), buyers defending support
  
• Bullish engulfing (large green candle covers prior red), buyers back in control
  
• Morning star (3 candles, strong red, then doji, then strong green), bullish reversal at support
  
• Marubozu green (full-bodied bullish candle, no upper/lower wick), conviction from buyers
  
• These suggest the neckline is holding & an ascending triangle breakout is possible
  

At Top ($598), watch for rejection candles & at neckline ($556-$564), watch for defense candles (hammer, engulfing, morning star)

• Confirmation comes not from just one candle, but the follow-through