Langutang

Diamond Tops are a Short's Best Friend

Short
NASDAQ:ETSY   Etsy, Inc
I'll let the formations do most of the talking. The diamond tops are some of my favorite technical chart patterns, but this comes with a couple added points:

  • Break the area of support on the Diamond's right side
  • Must have a lot of volume after breakthrough
  • Some important news backing the move
  • Declining Momentum indicators or crossovers are a bonus

I wanted to pull up $BA as an example of the diamond top. The incredible short came with COVID as well as MAX8 restrictions imposed on their products. We may not see the same pull back in ETSY (I don't think we will.... but in this market who knows), and with earnings coming up, this is the news to run back some wins on the COVID hot stocks.

From the run up, the diamond bottom is riding perfectly on the first support of a fib extension. If we see a break on the diamond support and the fib extension, we can start to see the market go lower here. Deciding if I want to play earnings or not, I will keep updated

All love and best of luck traders
Comment: So far, so good. Taking some profit here