AMR MAY offer a fresh chance for opening a short position !
Stock has recently lost 50 day moving average which now acts as strong resistance. Stock struggled 4 days to take this previous support back and was not successful at all .
AMR also, lost the last low ( marked by arrow ) which is a sign of trend reversal. In addition, It has completed the pull back to both lost low ( related resistance has been shown as a horizontal red line) and 50 days moving average.
Only remaining condition for opening a safe short position is a strong bearish candle below the cluster of candles shown by a circle.
Stop loss can be a bullish candle above mentioned cluster and 50 days moving average.
First target is around 104 and second target is around 70 therefore Reward/Risk ratio is extremely high.
I myself took higher risk and already opened a short position by using Elliott waves in Hourly time frame which can be reasonable considering market condition and sentiment however, more safe entry condition is explained above.
Hope this to be useful and wish you huge profits.
Comment
⋅
We made together another nice trade and made acceptable profit so far. Congrats my dear followers.
@oliverrathbun, It is a valid scenario I think..Nice chart.. Thanks..Also you can add 200 days moving average to the chart and you will find out it is near the last low at 103.9. As we know, Higher degree wave 4 usually terminates in territory of smaller degree wave 4(your wave 4 of V which you did not show on the chart). Recent rally looks like 5 legs impulsive wave so it may be wave 1 of 5 and we can catch wave 3 of 5 and then go short after completion if wave 5 of 5. 114 to 122 zone may be our entry zone for now. I closed my short position with nice profit at the day of reversal at 107.6 USD. Loosing base of channel or last static support makes this assumption invalid.
oliverrathbun
⋅
@SaeedSajedi, Yes, that was a great short trade... Risk reward on a long trade is good at this point as the channel is close to the presumed wave 2 of 5. Good point on the 200 ma. I'm not convinced wave two is complete yet..... Also thanks again for the NVDA post...I think the pattern may have completed yesterday.
SaeedSajedi
⋅
@oliverrathbun, I agree about wave 2. It still may have some work to do. About NVDA you are welcome. I am curious to see if that pattern works. Premarket data shows yesterday high might be a pivot.
oliverrathbun
⋅
@SaeedSajedi, I agree, I'm seeing similar set-ups in a lot of big names....This could be a significant sell off.
SaeedSajedi
⋅
@oliverrathbun, Agree. SPX might be in final legs of wave C of B or 2. Last week rally seems irrational to me. Nothing changed and FED is still determined to raise the rates.
oliverrathbun
⋅
I find it incredible that this stock was under $2 just 2 years ago..... That being said....using Elliot theory, on a higher timeframe, what do you think the chances are that this decline is the termination of a wave 4?
SaeedSajedi
⋅
@oliverrathbun, Well, I think at current point there are many alternative scenarios. It is possible that we just see the correction for up going wave started on 26th Nov 2021 . This itself can be wave 5 of 3, in this case we will see larger correction of course. I prefer to wait for corrective way to unfold in order to recognize wave degrees. What is clear is the signs of weakness in the stock. Higher highs from 18th Apr 2022 to latest high show bearish divergence with both stochastic and RSI indicators. What is your opinion about wave count in daily or weekly time frames?
oliverrathbun
⋅
@SaeedSajedi, I'll do this in two steps to verify the placement of my channel to better give an idea of projections for a presumed 5th wave high. Although in this market a wave 5 may be too much to ask ... Ha Ha.... I like to use channels to help identify waves. If a stock can't stay within price channels I'm skeptical that it's maintaining an impulsive wave pattern. This stock has maintained the structure within the blue channel lines.