The nice thing about broadening your knowledge in trading is that you can start to gather more reasons for a certain thing to happen at a certain price level. Being trained harmonics and structure trading. I immediately saw this potential bat pattern formation completing into previous resistance on the daily chart.
Finding reasons why it would go there proved a little more difficult in the past. Learning a little more about MACD, momentum and divergence and we can find reasons why this pair might just complete this pattern. OK, I'm still pretty new at this so positive criticism is always welcome.
As for the bearish bat itself, it will be a tough cookie to break through the 50% retracement of XA as there is some support/resistance as well. If it eventually does, the bat might complete with a spike up into the reversal zone due to the previous failed attempts to break into this price level, so you it's very well possible just get 1 opportunity to short it in the PRZ. I'd strongly advise to check on the lower timeframes to look for a good entry. As the target zone contains the 1.00 even handle (parity), it can work as a magnet to attract price.
As always, only time will tell what direction we'll be heading, this post is merely a what-if scenario :)
Wish you all a good trading week, may the pips be with you !
Comments
PipMentor
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Hi Nico, thanks as always for your analysis. A larger Gartley seems to agree with your bat? :)
Thanks for your reaction. If I understand correctly you are looking for C of your Gartley to align with the completion of my bat pattern ? Seems realistic ...good find ! :)
PipMentor
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Yep it seems like the C of the Gartley and the D of the bat are in the same PRZ :)
Thanks for all your posts, they are very helpful.
Nico.Muselle
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You are very welcome, and thanks for pointing out that Gartley as well ! :)
Realisto_FX
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If we have a daily close above 0.98, I will join the bullish crew . Below 0.974 there´s still possibility of bearish resumption
Nico.Muselle
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Thanks for your reaction. We are currently sitting @ a resistance zone around .9775 and indeed price needs to close above this in order to go bullish and complete the pattern. I think .98 would be a good place to do so. :)
jangseohee
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Hi Nico,
i might have a tendency to short though
Nico.Muselle
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Hi jangseohee, thanks for your opinion. On the longer term I agree that there is a potential to the downside. It is very difficult to compare a daily chart (mine) and a monthly (yours). It's like comparing a 15 minute chart and a 240 min chart. The move up I am looking for to be able to short and go in the same direction as you are looking for would be hardly visible on the monthly chart. The momentum for this little move up is certainly there and we already have part of the move back up on the daily, but as always it is a prediction, not a certainty :)
tradingview.com/v/B6tedboW/