Bullish Plays in the NDX and Apple

With the Nasdaq 100 Index (NDX), I'm not convinced that this index is going to continue on to new highs given what is going on in the world. The technicals, however, are currently still bullish. What I would like to do is give you some parameters to watch that could clue you into a reversal back down.

First, let's talk about why the current chart is still bullish. A pattern of higher highs and higher lows is considered bullish. Also on the daily chart, when price is above the 200-day and 50-day simple moving averages and the 5/13 ema combo is in a buy mode, with the 5 above the 13. This is also considered a bullish position.

Now there's another interesting pattern on this chart, since the 3/23 low was made. Note that the declining swings labeled on this chart have only lasted one or two trading days from any high. After those declines, the rally resumed. This just happened again, as the most recent decline from the 5/12 high has lasted 2 bars from that high -- and so far the rally has resumed. Now typically, if this is a more important low, the initial upside target we usually see is the 1.272 target from the low, which comes in at the 9488 area. That is what we'll shoot for as long as price continues to hold above the 5/14 low.

Let's discuss what could hurt the current technical position in NDX. If we start to see a decline from any high that lasts MORE than 2-3 trading days, that is a warning that the pattern might be shifting back to bearish. Also if the 5/13 ema combo crosses back to the downside, that is another warning that we may start to see a deeper decline.

Bottom line, currently the path of least resistance is for higher prices. If we start seeing any of the negative signs discussed above, then it's time to protect profits on longs.

Let's also take a look at a daily chart of Apple (AAPL) . This chart is very similar to the NDX as far as the pattern and moving averages are concerned.

Even though AAPL has not tested my key support on the daily chart, at the $296-$298 area, it HAS tested key support on the 30-minute chart. 

So far we've seen a couple of buy signals since testing this support. Some are already long looking for an upside target at the $324.99 area. A stronger buy signal will be when the 8 ema crosses above the 34 ema on the 30-minute chart.

The max risk on any new longs for me would be below the $296 area of support. I'll consider myself wrong this setup if we break that zone. Also note that in the bigger picture, my target number 1 from the 3/23 low comes in at the $359 area. Let's see if AAPL can hold key support or not.

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At the time of publication, Boroden had no positions in any of the securities mentioned.