Range-Bound Market Strategy: What to Trade & How to Survive the Chop

Range-bound market strategy is essential right now, as the market has been trapped in a tight box for over 10 sessions. We're neither in a clean uptrend nor a full-on breakdown—just pure chop, and that means we need to adjust our approach. Let’s break down the range-bound market strategy, sector rotations, and the key setups for the week ahead.

Market Overview

The range-bound market strategy starts with understanding the structure. The $QQQ is trading inside a 10–15 point range, and we’ve seen repeated fakeouts both to the upside and downside. Until this box breaks AND successfully retests, we’re in a choppy, scalper-friendly environment.

• Key support: ~486 on QQQ
• Watch for breakout > retest > hold before committing to trend trades
• Same setup applies to $SPY and $IWM

Sector Rotation Within a Range-Bound Market

While tech remains range-bound, energy ($XLE) is starting to look strong. Things like GOLD ($gld) and energy are boring but leading the way.

• Oil & gas stocks are showing signs of life—great for swing trades, not so much for day trades.
• Gold stocks have perked up as well.

Watch setups in names like $LNG and $GOLD for slow movers with breakout potential.

Watchlist & Setups

1. $AP – Clean breakout level around $315. Needs market confirmation.
2. $PNT – Already stabilizing while the market was dumping. Bullish if it holds 50-day MA.
3. $BEKE – Watching for a gap down to 50-day for a bounce play.
4. $NFLX – Mini flag at the 50-day MA. Good range, but sloppy intraday.
5. $UPST / $AFRM – Building higher lows. Breakout potential if market firms up.
6. $PDD – Earnings reversal, then inside day. Classic continuation setup.
7. $LASR – Bottoming setup with volume accumulation. Watch for push above recent highs.
8. $META – Hovering near the 200-day MA. Watch for breakout or breakdown.

Trading Notes for a Range-Bound Market

• Scalper's market: Think income trades, not home runs.
• Avoid chasing breakouts unless the broader market confirms.
• Stay flexible. In this environment, a bottoming setup can turn into a bear flag in minutes.

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