SQQQ: Bullish Setup
Entry Date: 05/20/2014; Long: 52.88; Stop: Below trend line; Target: 77
Reason: Head & Shoulder
In the weekly chart of NDX we can see a potential Head & Shoulder reversal pattern.
If the horizontal resistance at 3627 is not breached odds would favour the formation of the right shoulder.
If this bearish pattern pans out the theoretical target is located at the trend line support in force since the 2009 lows which coincides with the 0.5 retracement of the advance from the November 2012 to the March high (14.5% decline from today's hod).
The right shoulder could have been completed with a wedge. In the case of SQQQ it is a bullish Falling Wedge.
Even though it is not certain that the wedge is done I anticipated the confirmation since today's Doji may form a Double Bottom within the assumed wedge.
So I am long with a stop below the lower converging trend line. The theoretical target of the inverted Head & shoulder is located at 77.