An established down trending channel and the price action feeling the heat at the resistance line of the channel. A quick look to the left as we are at an intersection observing a STOP sign ahead(prior breakdown level now turning resistance acting as STOP sign and resistance line cluster), it forces us to STOP and LOOK for a CLEARWAY to proceed/continue with a posture. If there isn't one and price turns back by force what may happen ? Could it be that short seller is out firing with their full force when the REWARD RISK is most favourable ?
Simply put, what to look for on the chart for this scenario to potentially unfold ?
If we drill the same chart on the daily ( not shown) a support break with a high bar may be what to look for. Even on this monthly chart the bar of interest is Feb which may hold the key going forward. At this stage, it ( Bar made in Feb) is only a one bar reversal waiting an added confirmation.
What could be an added information ?
A COMPLEX REVERSAL (Short Term Trend Reversal) or alike in candle reversals. If I was to describe it : A bar with a close below the bar with a highest high. Highest high being the bar of February. What is the low of this bar made in Feb. ? What is the high of the same bar ? Only two levels to keep an eye on. What is important here is that wait till the end of the month to get the end of month close or look for a confirmation of a support break in the daily that holds.
After all, it is a game of probability. Can keeping an eye on a single monthly bar be an effective strategy ? To be continued....