Nasdaq Straddle. Yesterday’s stock market sell-off was unexpected and steep for most traders. Now the Nasdaq 100 stock technology index is on the brink of an uptrend. Capital Analysis publishes two analyses at the same time. The first analysis speculates on rebound and rise of the price again. The second then speculates on the use of short input in case of support breach.
Given today’s ECB meeting, a possible rebound and a resurgence of prices appear realistic. Many traders are still not willing to accept a possible variant of a more significant correction of stock markets and try to push the market upwards. The euphoria after the slightest positive message will be quick and strong.
At the same time, any panic if the needs of the market and traders are not met could be overwhelming and relentless.
The long analysis comes with a potential ratio of 2:1. Twice the expected profit in relation to the risk taken. On the contrary, the short analysis for breaking through the supports and a possible sale is not yet limited by the “stoploss” instruction. Significant volatility could continue to unnecessarily affect the outcome of the analysis if sales continue.
Charts and Tables source: WebTrader