The biggest bullish indicator that seems to hold true on a regular basis for NDAQ is the Williams %R indicator for 14 and 28 day periods.  I’ve highlighted NDAQ in this space a couple of times in the past when this happens and today is another buying opportunity.  I’m already sitting on NDAQ February 20 naked puts and yesterday I bought some more shares outright in my IRA.  I think there’s plenty of upside left for NDAQ and see at least another $1.00 in it in the near term.  NDAQ is fairly volatile, but tends to trade in a range.  $18 is the bottom of that range and the top side has been shrinking, so I’m not sure how high it’ll go before taking a breather again.  Having GS pushing it could help get it out of its rut though.  I’ll be in for the ride for at least another 5% to the upside.

Along with the moving averages, the trend line of lower highs is just above the current price.  Williams %R is starting to level out and is more neutral.  Waiting for NDAQ to head back closer to $19 might be a safer move right now.  I cannot call NDAQ a buy quite yet with the look of this chart.

This is one of my favorite charts to follow using the Williams %R technical indicator and I’m kicking myself for not closing my July 20 naked puts earlier when I saw it turn.  It could turn out OK if I’m right about its chart.  NDAQ is using the previous resistance trend line of lower highs as a new line of support for lower lows.  NDAQ is still going down, but at a slower pace.  The real key I see in this chart is that NDAQ just hit the bottom edge of Williams %R oversold for both the 14 and 28 day indicators.  Check out the lines I drew for the past five times this has happened.  You can see that NDAQ rallied nicely from each of those points.  It’s not guaranteed to happen a sixth time in a row, but does present a picture that shows a good risk/reward opportunity in my opinion.  I’m not doubling down from my naked puts I already have in place yet, but might have to consider buying July 20 puts for a really short term trade.  With those trading at a bid/ask of 0.20/0.25 buying calls could be a lower dollar, high percentage trade to make. 

• NDAQ hit its lower trend line of higher lows
• NDAQ’s Williams %R indicator is hitting the bottom of its overbought range for both its 14 and 28 day indicators

Opinion = NDAQ will likely move up from here.  Based only on the two bullets above, NDAQ has moved up when these conditions met in the past.  All trends break eventually, but I don’t think this is NDAQ’s time yet.  I sold June 17.50 naked puts on it yesterday and even said in my post that I thought it would hit close to $18.00.  It did and now I think it’s ready to recover, again.

• I highlighted with blue lines the last four times (before doing it again today) over the past six months when NDAQ was touching the -100 line on oversold for Williams %R. 
• NDAQ is touching is five month trend line of slightly lower lows
• NDAQ is trading below its 10, 20 and 50 day moving averages
• The trend line of NDAQ’s lower highs is falling faster than its trend line of lower highs

Opinion = Based on NDAQ’s previous reactions to hitting such a low spot on Williams %R I think it’s ready to bounce again.  Each bounce gets lower, so this could/should be a quick trade.  Since all trends eventually break I suggest waiting to see some sign of life off the bottom before getting in.  That could be as soon as this afternoon or tomorrow.  NDAQ typically spends two to three days on this bottom line, so tomorrow or Wednesday is more likely.  That gives time to see if it holds support around $18.35 – $18.40.