Using price action to spot trend reversal
Updated
This is one stock that is in my watchlist.
As you can see, there is a descending wedge (bullish signal) within a descending channel. On bigger time frame, Day chart, I am awaiting for it to breakout of 9.00 before initiating a long position.
But the last few days have been a parabolic moves for the China market. It is as if it is living on steroid, a 90% parabolic move which presents risks and opportunities.
I will wait for it to perform a correction, around 7.44 to 7.69 where there is a gap before going long. If it does not close this gap and continue to head north, then I will wait for it to breakout the bearish trend line at around 8.69 level before taking my long position.
Remember, there is no need to have fear of missing out and go ahead to chase the high price. Be patient.
As you can see, there is a descending wedge (bullish signal) within a descending channel. On bigger time frame, Day chart, I am awaiting for it to breakout of 9.00 before initiating a long position.
But the last few days have been a parabolic moves for the China market. It is as if it is living on steroid, a 90% parabolic move which presents risks and opportunities.
I will wait for it to perform a correction, around 7.44 to 7.69 where there is a gap before going long. If it does not close this gap and continue to head north, then I will wait for it to breakout the bearish trend line at around 8.69 level before taking my long position.
Remember, there is no need to have fear of missing out and go ahead to chase the high price. Be patient.
Comment
it fails to break out of bearish trend line. it is likely to close the gap as shown on chartComment
it has closed the gap perfectly . now we need to see if there is any reversal in the price action later morningComment
OK, so it has closed the gap and we see a reversal pattern, a doji followed by a green bullish candle. Today, we shall see if the trend continues.....Comment
if at current price level, it fails to rebound , then it is likely to fall further towards 6.24 levelDisclaimer
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