Today, we will speak about the current situation on AMZN
- The price has been trading inside a range from September 2020 until July 2021 where we observed a Breakout.
-Currently, we can see that the price re-entered the broken range. What can we expect from here?
KEY IDEAS:
-From a technical perspective, it's extremely common that after daily breakouts (structures with a duration higher than 100 days), we observe a throwback (or a retest). As you can see on the previous range, we saw the same sequence.
-It's commonly accepted that the target of broken ranges is at least the size of it on the broken direction (we can see some notes of this idea on Wykoff Theory). That is the minimum target that we should expect.
With all that clear, let's go to the interesting thing, what is our view on this?
IF the price breaks the descending trendline of the current throwback and reaches our green activation line, we will take that as a confirmation of the bullish movement towards the minimum target, of course. At those levels, you should be protecting your capital by moving your stop loss to the entry-level (that is what we do). From there, we want to let the price keep going up towards the final target at 4700
Let's speak about the stop loss and risk:
-IF the entry is executed, we always set our stop loss below the throwback, and we use a risk between 1% to 2%, never more.
-IF the entry is never executed and the price keeps falling, and we lose acceptable risk-reward ratios, we will cancel this idea.
-IF everything goes as expected, we think this movement can last 150 to 200 days
Thanks for reading!
- The price has been trading inside a range from September 2020 until July 2021 where we observed a Breakout.
-Currently, we can see that the price re-entered the broken range. What can we expect from here?
KEY IDEAS:
-From a technical perspective, it's extremely common that after daily breakouts (structures with a duration higher than 100 days), we observe a throwback (or a retest). As you can see on the previous range, we saw the same sequence.
-It's commonly accepted that the target of broken ranges is at least the size of it on the broken direction (we can see some notes of this idea on Wykoff Theory). That is the minimum target that we should expect.
With all that clear, let's go to the interesting thing, what is our view on this?
IF the price breaks the descending trendline of the current throwback and reaches our green activation line, we will take that as a confirmation of the bullish movement towards the minimum target, of course. At those levels, you should be protecting your capital by moving your stop loss to the entry-level (that is what we do). From there, we want to let the price keep going up towards the final target at 4700
Let's speak about the stop loss and risk:
-IF the entry is executed, we always set our stop loss below the throwback, and we use a risk between 1% to 2%, never more.
-IF the entry is never executed and the price keeps falling, and we lose acceptable risk-reward ratios, we will cancel this idea.
-IF everything goes as expected, we think this movement can last 150 to 200 days
Thanks for reading!