2 days ago, BCH settled into to a small corrective structure (large red rectangle). As things played out, a well-defined resistance level became apparent and buyers kept buying in at relatively higher prices (red trend line).
Towards the end, an even smaller corrective structure formed and I was able to buy in with a limit order after price broke above and pulled back to it. This entry (at $1350) allowed me to set a tight stop and catch the breakout of the larger corrective structure. So far, I am up 5Rs (probably less by the time I finish writing this) but I think this trade could run so at this point I plan to hang on as a retest of the highs would be about a 14R trade.
This could play out a few ways:
Best case, BCH breaks resistance @ 1430, perhaps pulls back to retest, and continues on. A retest would be a good spot to have an order waiting. I will move my stop up after a solid break of this level.
Another possibility is that resistance at 1430 stops price and sends it back to retest 1370--this is strong support and would be a solid place to buy a pullback. Since my stop is already at break even, I will likely place another limit order here just in case.
If 1370 breaks on this timeframe that will a pretty good sign that the bears are back in control.
Towards the end, an even smaller corrective structure formed and I was able to buy in with a limit order after price broke above and pulled back to it. This entry (at $1350) allowed me to set a tight stop and catch the breakout of the larger corrective structure. So far, I am up 5Rs (probably less by the time I finish writing this) but I think this trade could run so at this point I plan to hang on as a retest of the highs would be about a 14R trade.
This could play out a few ways:
Best case, BCH breaks resistance @ 1430, perhaps pulls back to retest, and continues on. A retest would be a good spot to have an order waiting. I will move my stop up after a solid break of this level.
Another possibility is that resistance at 1430 stops price and sends it back to retest 1370--this is strong support and would be a solid place to buy a pullback. Since my stop is already at break even, I will likely place another limit order here just in case.
If 1370 breaks on this timeframe that will a pretty good sign that the bears are back in control.
Comment:
First pullback to support--triggered my limit order--probable that this level will hold but nothing is certain. This stop is set at 1326--beyond this I would like to be out.
First pullback to support--triggered my limit order--probable that this level will hold but nothing is certain. This stop is set at 1326--beyond this I would like to be out.
Comment:
I would like to be seeing a stronger reaction off of this level...a little surprised by how soon we are seeing a retest and the intensity of it.
Comment:
I'm still hanging on to my original trade because I entered below support and I suspect this corrective structure will eventually break to the upside but in the meantime am also continuing to buy intraday pullbacks at support and sell at the top of the range. Support is becoming defined enough for orders with tighter stops. I'll be looking for a breakout if price starts spending more time at the time of the rectangle.
Comment:
*top of the rectangle
Comment:
A bit premature but it looks like the corrective structure has failed and bears are back in control on intraday TFs. Still possible that this is just a deep pull back into an ill defined S/R zone but this zones has reversed price in the past to a reversal would not surprise me. Shoulda took my 5R off the table when I had the chance :/
Price appear to be breaking down on the 5m chart which makes a retest of 1370 a little more likely.