Here is another example of an uptrend with a consolidation. There are actually a number of these in the markets but this is one of the cleanest examples.
The weekly timeframe has shown a crazy hard pump and is reading as if it's a flag which is a good sign of consolidation and a potential upside if it breaks. Going out to the daily the market structure is fairly well pronounced culminating in a consolidation triangle at the top. There has been 3 pushes to the resistance band with weaker rejection each time. When i read these, I envision a battering ram on a door. Each hit weakens the resistance a bit more giving more confidence that the next hit is going to break through.
Entry:
With a 3 push to the resistance band and higher lows, I would be looking for an entry on the rise of the triangle with the stop under the previous low. You have to look really closely but the 1-13 market session is a higher low. That said, I would probably use the previous low as a buffer.
Target:
Zoom out to the weekly and run back a few years for the last time this was in this range and you'll see a target of round $37 or so.
Risks:
Earnings...I really dont like being in a trade during earnings. There's just too much uncertainty around that. Earnings for this is 3-3 which leaves a little over 7 weeks to get in and get out if it hits your trade rules.
As always, manage your position size based on the 1% risk rule.
The weekly timeframe has shown a crazy hard pump and is reading as if it's a flag which is a good sign of consolidation and a potential upside if it breaks. Going out to the daily the market structure is fairly well pronounced culminating in a consolidation triangle at the top. There has been 3 pushes to the resistance band with weaker rejection each time. When i read these, I envision a battering ram on a door. Each hit weakens the resistance a bit more giving more confidence that the next hit is going to break through.
Entry:
With a 3 push to the resistance band and higher lows, I would be looking for an entry on the rise of the triangle with the stop under the previous low. You have to look really closely but the 1-13 market session is a higher low. That said, I would probably use the previous low as a buffer.
Target:
Zoom out to the weekly and run back a few years for the last time this was in this range and you'll see a target of round $37 or so.
Risks:
Earnings...I really dont like being in a trade during earnings. There's just too much uncertainty around that. Earnings for this is 3-3 which leaves a little over 7 weeks to get in and get out if it hits your trade rules.
As always, manage your position size based on the 1% risk rule.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.