Without any blablablaa...let's jump straight into the current action. If the last trading idea was a breakout trade then today's high probability setup is a reversal trade. It is definitely a bit riskier because we are on the weekend and lately weekends have been interesting - full of volume and movements, especially to the upside. Today's setup is a sell but there is also a pretty clean buy confirmation. As always, do your own research and if this matching with my views then you should be ready to take action.
Reversal area around $11,500 consists of multiple criteria which all should work as resistance levels: 1. Trendline from the top (a thin dotted line from the 2019 high) acts as a resistance 2. The parallel channel upper trendline still should work as a resistance. 3. Strong and important price level $11,450 - 500 acts as a resistance 4. Previously worked resistance level in 3. July will give an indication that there could be starting to form a bearish chart pattern Head and Shoulders 5. Short-term Fibonacci golden ratio 62% matching exactly with the prementioned criteria 6. A smaller channel (blue line) upper trendline is on the crossing area 7. Short-term AB=CD
So, we have a pretty high count of reversal criteria in a tiny price zone. You can choose between three options: 1. Sell immediately and the SL goes above the slightly above the $12,000 but if the 1H or 4H candle gets a close above the $11,750 then you can close it manually. 2. Those blue channel lines are as a Bear Flag, so the second option and more secure option - wait for a breakout below the Bear Flag and the target is $10,000 3. Just wait and watch it but if you see a 1H or 4H candle close above $11,750, then buy the breakout.
SUMMARY: At the moment the price is on the strong resistance area where it can make a drop. The recent price action has been pretty bearish, which increases the odds that it may drop but still, more secure trade would be a sell after the candle close below the Bear Flag and the target in both scenarios would be the 10k
Do your own research and if this matching with one of my three options then you are ready to go!
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Best regards, Vaido
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I add a picture also, for phone users the major image looks a bit messy: If you find something useful from here then do not forget to support ;)
Have a great weekend, Vaido
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Mentioned previous analysis:
Cheers, Vaido
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Update: The bearish setup has become a bit stronger IF we get a 1H candle close below $11,300. Then we have a breakout from the bearish chart pattern called Descending Triangle and the rejection came from the pretty strong area (the reversal area, criteria is on the major post).
Also, we can adjust a breakout upwards. The possible next movement upwards should get confirmed after the 1H candle close above $11,570. SUMMARY: The sell setup is still strong and it gets more secure after the breakout from Descending Triangle BUT meanwhile, if the price stays too long on the potential reversal area it lowers the trade success rate. So, wait for a breakout from the triangle!