Here we have a nice symmetrical triangle inside a clear rising channel from the low a few weeks ago. We can therefore expect an upside breakout towards the consolidation zone as all moving averages are pointing upwards and bullish on 1 hr, 4hr and daily charts (except the 100 day which is still lagging below the 200 DMA and a note of caution). We now also have a rising 200 day moving average and a golden cross. Prices have been coiling up for a few days now which implies a breakout to the upside is imminent and may be explosive.
The big question is how far will the breakout go? Will it take out the previous high of 10,520 ish to continue into a proper bull run? Smart traders will see that this current rising channel is also a potential reversal signal so should it break downwards inside this long term (3 year) consolidation/ bear market that's a bearish signal. It's also going to take a lot of power to get above 10,520 and stay there. I will therefore be taking my long profits between 9800 and 10,520 as I expect most professional traders will.
However I like to only trade with the direction of the 200 period moving averages which in this case are all bullish, so I won't be taking fakeout shorts at this stage or breaks of the rising channel to the downside. People say the last golden cross failed but they didn't see the 200DMA was falling in that case, here it is rising. What this means is that should we wick massively up then down I will be taking long profits on the way up and re-entering long again on a nice wick down until the 200 day MA turns negative. We actually have some nice support areas built in the 8300-9500 region. If we break 10, 520 and consolidate there, then great I will re-enter longs there to.
Who knows after all the bearishness of the last few years maybe the breakout will be huge... but then again maybe not. Best not to get greedy on breakouts but take profits and look for sensible re-entries.
The big question is how far will the breakout go? Will it take out the previous high of 10,520 ish to continue into a proper bull run? Smart traders will see that this current rising channel is also a potential reversal signal so should it break downwards inside this long term (3 year) consolidation/ bear market that's a bearish signal. It's also going to take a lot of power to get above 10,520 and stay there. I will therefore be taking my long profits between 9800 and 10,520 as I expect most professional traders will.
However I like to only trade with the direction of the 200 period moving averages which in this case are all bullish, so I won't be taking fakeout shorts at this stage or breaks of the rising channel to the downside. People say the last golden cross failed but they didn't see the 200DMA was falling in that case, here it is rising. What this means is that should we wick massively up then down I will be taking long profits on the way up and re-entering long again on a nice wick down until the 200 day MA turns negative. We actually have some nice support areas built in the 8300-9500 region. If we break 10, 520 and consolidate there, then great I will re-enter longs there to.
Who knows after all the bearishness of the last few years maybe the breakout will be huge... but then again maybe not. Best not to get greedy on breakouts but take profits and look for sensible re-entries.
Trade closed: target reached:
I've now closed my longs with an average closing price of 10,100. This represents a nice 600 point gain from this trade. I can now comfortably sit on the sidelines and wait and see if we consolidate above 10,520 for another re-entry and sleep well or take another long re-entry if we swing back down to 9300-9600 which is equally likely. This shows the great benefits of buying before breakouts and not after.
About me: I'm a retail day trader (trading since 1993). Most ideas here are for short time frames and become profitable quickly. I take profits fast as things change fast. 1-2-1 mentoring sessions available.
Telegram coming soon.
Telegram coming soon.