Technical Swing Trading Spotlight - Global X Internet of Things ETF (SNSR)

Weve touched upon the Internet of Things, or IoT, in previous articles, so hopefully, you know by now the kind of disruptive potential it holds for the future of technological ecosystems. Another tech development which you should be aware of is the importance of 5G technology. A 5G communications system is currently the best way to power IoT connections. So the two go hand-in-hand.

If youve been following the IoT space for some time, you might be aware of the Global X Internet of Things ETF (NASDAQ: SNSR), perhaps one of the most direct ways to get IoT and 5G market exposure. Were not going to cover the fundamental details of SNSR, so if youre looking for more info, feel free to find it here.

Since this is a technical swing trading piece, well take a look at SNSRs price action and read it from a swing traders perspective. Here we go:

Fundamentals aside, current price levels can be viewed as both a retracement of a strong downtrend or the smaller formation of a weaker uptrend. The assessment of strength in either direction is attributable solely to volume, or buying vs selling pressure.

The downtrend starting at [A], its swing low pivot at [B], and retracement peak at [C] mark a deep pullback of nearly 77%. Note that shorts who entered their position at the [A] are currently as profitable as those who entered their positions near the start of the uptrend (or retracement) at [i]. Why an uptrend? On a smaller scale, not only does it follow the basic price action principles of higher highs and lower lows, it also cleared the support and resistance levels of the wide trading range illustrated by the orange rectangle. Supposing you viewed this as an uptrend, note that its current retracement of 23.6% is quite shallow, suggesting the possibility that price may be able to retrace deeper without invalidating the uptrend bias (if that happens to be your bias).

So what does this all mean for us now?

Look for a high-volume breakout (and follow through) at [1]. Should both occur (and if the fundamental context supports it) then look to meet resistance at the Sept 21, 2018 high near 20.85 as shown at [2]. Should price continue to break down at [2], then expect two potential downside targets at two consecutive swing low levels [3] and [4], or respectively near the price levels 17.98 and 17.19.

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