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Navigating a volatile John Wayne market can be a daunting task as trends are frequently erratic and unpredictable, leaving investors feeling uncertain. Consequently, traders rely on two primary analytical methods to assist them in making informed decisions. Technical Analysis (TA) involves analyzing chart patterns, technical indicators, and price movements to identify trends. On the other hand, Fundamental Analysis (FA) takes a more macroeconomic approach, with traders assessing real-world events and socioeconomic factors to determine market sentiment. Both strategies are highly effective and worth comprehending, particularly in a John Wayne market. Presented below are my two theories based on each type of analysis. From a technical perspective, TSLA's been consolidating and holding its upward trend, AKA the 50 SMA on the daily. The rebound above the 9 EMA, 20 SMA, and 50 SMA after trying to push lower suggests strong support from buyers. If TSLA surpasses the psychological level of 200, it'd confirm the bullish theory, turn resistance into support, and potentially reach 216 and from there breakout to 250. TSLA looks promising here and the longer it barcodes, the more bullish my theory becomes.
From a fundamental perspective, I'm looking at SOXS which is a 3x'd leveraged ETF that inverses Semiconductors using swaps, which means it goes up when semi's go down and vice versa. With semi's so overbought right now, primarily led by Nvidia and the AI boom- investors are preparing for profit taking. That being said SOXS is primed for a rally in the upcoming weeks.
Keep in mind though inverse ETF's like SOXS are designed for short-term trading and carry way more risk than traditional ETF's. They're highly volatile and not intended for long-term investments since the fund deteriorates over time. Therefore, one must proceed with caution.
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