3. indicating oversold
4. formation signaling possible reversal
5. Confirmation following to confirm trend change
6. Fibonacci levels to identify potential sell point to take profit
Watching the charts this morning for an early Christmas present, I noticed the formation of an (4). The criteria is as follows
- Must follow a downtrend
- Upper shadow must be at least two times as big as body
- Lower shadow really small or non existent
- Body located at lower end of trading range
Added (1 and 2) for most recent movement to see what the potential lines of are.
Added overlay (3) and confirmed status as potentially oversold.
Waited until the next candle formed (5) after , for additional confirmation of change in trend.
Added Fibonacci overlay (6) from top of most recent significant drop within my downward , to the lowest point where the (3) formed.
Entered my position around 101 and exited my position around around 110000, near Fibonacci level 0.786.
Will watch closely to see if this is a new upward trend, or merely a retracement within a continued downward trend.