Of course, momentum breaks occur in the ebb and flow of impulsive waves, perhaps mostly when we are chasing a fleeing enemy. However, to solely trade momentum will bring troubled dreams as its wake does not last for ever: a momentum break which only crops up occasionally should be capitalised on and used to build full sized positions right into the endgame. So, the following breakout merits our special attention. It is about a momentum break which suddenly appeared, with smart money pinging EOS out from the lows. Some 10 bars later, the game seems to be following purely technical flows with bulls now dominating the board.
Bull's next move sees the swing materialise into an impulsive nature, for the threat is now an advance on the initial target at $4.50 at the right moment and extensions at $7.50. At the point where the swing was created will see defence return and absorb the momentum break, and is therefore logically linked to profit taking !!
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