Last week, AMAZON's earnings resulted with a huge rally, exploding AMZN into the PRZ of a bearish Butterfly I've been monitoring. My pre-earnings setup was bullish with anticipation that the price will complete the pattern and create a bearish opportunity I've been waiting for since August's low. The first target of this setup is 550-560$. The top of the broadening weekly pattern. Then.. if AMZN will decline lower, it'll pave the way to deeper retracement levels like 500$ and 450$ and it will create a weekly False Breakout to the weekly pattern
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Pullback is now close to the top of the PRZ. Pattern is being tested now. Weekly close will determine the validity of this setup
In such cases, I usually use Fib extension levels (1.414, 1.61.8) or acceptable percentage of risk above the high (like 3%-5%) above Friday's high. Other way to play it, wait for a pullback higher and look for smaller time frames reversal patterns near previous high (61.8 Fib level, 78.6, double top or False Break)
It depends on your trading style, your risk tolerance.. on a whole lot of factors. I hope that helps