Weekly market update and developing (swing trade) long setup
Week 29 - Market Update
Hello everyone, welcome to this weeks market update. As usual, let’s start with the weekly chart.
WEEKLY
Not much has changed on the weekly chart. Our outlook is still that we will break the support around 6000 and then rapidly fall to 5000, eventually going even lower. However at the moment we seem to be working on a correction of the last big move down, respecting the downward channel. Let’s move to the daily chart to get a better idea of where this bounce might be heading.
DAILY
The daily chart looks interesting, first let’s see what Ichimoku tells us. Price and the tenkan-sen have crossed the kijun-sen, and the chikou span has moved into price. This tells us that we are consolidating the last downwards move, possibly heading towards a correction of it and moving up.
However, we’re in a strong bear trend on the weekly chart, and it is very possible for price to breakdown and drop fast and violently, quickly breaking prior support levels as if they were not even there… So we will need conformation of price movement before we step into any trade.
We also see the blue and red support and resistance zones which are trapping the price at the moment (as wel as the kumo). These create a no trade zone, and a break of one of them would either activate or invalidate our prior trade setup, as seen on the chart. There are no trades for us until price decides what it wants to do!
Let’s have a look at our trade setup on the 2HR chart and see if it gives us any more information
2 HR
Ichimoku gives us a bullish picture. However, because we’re still in the (daily) no trade zone the kumo breakout was not tradable. The price made a lower high, so we’re waiting for it to make a higher high to confirm a (short term) bullish move upwards. We expect the green scenario to unfold, after the price breaks the resistance zone we should move upwards to our first target fairly quickly, ideally after a pullback to the breakout level. However, be very conscious of the bearish scenario. The red arrow is very possible! If we see signs of the move upwards failing, the bulls will not have the strength to break the resistance and we will start looking for bearish entries.
For now the green scenario is still at play and our short term long setup is still valid.
breakout level: 6900
Invalidation: 6000
First target: 7775
Maximum target: 8360
So sit back, relax, and let price tell us what do to..
And remember, always remain calm.
ZenTrading
Trade active:
Trade Active.
We broke through resistance and the breakout level, so the trade was activated. Now let's see if we can reach the first target to take partial profits. From there we may look to reach our max target after a correction. But more on that when we get there, one step at a time
We broke through resistance and the breakout level, so the trade was activated. Now let's see if we can reach the first target to take partial profits. From there we may look to reach our max target after a correction. But more on that when we get there, one step at a time
Comment:
We're still reaching for our first target, so be patient and don't worry. Invalidation level can be moved to below the broken resistance level.
Let's evaluate after reaching the first target. We expect to see divergences there, indicating a (minor?) pullback, but let's wait for that to develop.
Let's evaluate after reaching the first target. We expect to see divergences there, indicating a (minor?) pullback, but let's wait for that to develop.
This of course has to be: The price made a higher low...
Sorry if it caused any confusion ;)!