Short AMAT - Bearish Divergences
I see both on the 1D and 4H charts a bearish divergence on the MACD-H and EFI against prices. AMAT is pretty volatile so I suspect the divergence will lead to a move on the 1D chart to the -1 to -2 ATR lines (see the dotted 2 lines). This is because the divergence is strong and this ticker often times hits -1.5 and -2 ATR lines.
DMI shows ADX at the bottom, and -DI will go up, while +DI goes down. I expect ADX to rise along with -DI going up, possibly crossing it, this will then confirm the bearish strength.
I have to monitor the flow of the trade to decide where to get out. The estimate will be at least 49.03, but I set my target to 48.47 on the -2 ATR line, which will probably become -1 ATR when the decline sets in.
The StopLoss is set a bit above the resistance line. 1.5 ATR away
I will decide if I will see if it opens higher so I short from around 52. The other option is to go for a market order before I'm too late to short.
DMI shows ADX at the bottom, and -DI will go up, while +DI goes down. I expect ADX to rise along with -DI going up, possibly crossing it, this will then confirm the bearish strength.
I have to monitor the flow of the trade to decide where to get out. The estimate will be at least 49.03, but I set my target to 48.47 on the -2 ATR line, which will probably become -1 ATR when the decline sets in.
The StopLoss is set a bit above the resistance line. 1.5 ATR away
I will decide if I will see if it opens higher so I short from around 52. The other option is to go for a market order before I'm too late to short.
Comment:
Forgot to note here, that I entered at 52.42
Trade closed: stop reached:
This one gapped up immensely today, and I got stopped out. It happens.