This is for educational purposes only.
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What other clues do we have that the market can reverse from this zone?
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The great master technician Sokyu Honma was a great fan of triple bottoms. He would name them in Japanese San Sen. He was two centuries ahead of his western counterparts. His skill was so legendary that the Emperor made him a samurai. This was a great achievement since he was an orphan.
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In my opinion, the 27th of June (first bottom), 2nd July (second bottom), 17th July (third bottom)
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The price action on these three dates equals the San Sen.
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The first signs of strong hands entering the market is the bullish engulfing candle.
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What other clues do we have the market has exhausted and is going to reverse?
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Look at the chart above. Notice the two separate legs. Both are equal to each other. Some traders call this pattern an ABCD move. Once such a pattern is finished the market normally does a reversal.
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I expect the price to range around this channel trendline. But first price will find resistance at the end of the first impulse leg. Why, because retail resistance and support traders look for these entries. The market maker wil then push price higher and take out there stop loss.
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Above is the 1-hour chart. It did exactly as I predicted. Retail support & resistance traders took a short position at the resistance trendline. But the market maker took out there stop in the next candle.
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As I mentioned before taking a short position on the resistance trendline wouldn't be logical as an ABCD move was complete so the market would be expected to retrace much higher.
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I wouldn't look for a trade straight away just because price breached the channel trendline. I want further confirmation. Ideally, I want to see the market retrace. Why? I want to judge who controls the market, weak holders or strong holders.
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I trade two different methods. In this account, I focus on method two. This method requires patience, dedication in reading the market (don't be lazy in your analysis) and confirmation. By focusing on these principles you will lose less.
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Good opportunity to go long when the candle poked out of the channel.
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Conservative traders can wait for a retests
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In the chart above I have drawn a pitchfork. The pink line represents a time factor where price could conclude in the future.
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Price according to Dr. Andrews spends 80 percent of time on a Median Line.
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Therefore, I expect the price to test the middle and upper median line.
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There is a potential to go long on this trade if price retraces and retests the green horizontal line as shown on the original 4-hour chart. Remember this is my opinion and I'm not advising anyone to take a trade.
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Good to see the market has made another HH. But I still expect the price to retrace. However, it won't go below the low seen on the 17th of July.
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This is a key resistance zone. Price will bounce from this zone and do a correction. I expect future gains as the price is normally contained within a ML. Obviously its going toward the middle ML.