Guardant Health (GH) - Double/Triple bottom incoming
The chart shows a strong bearish trend that started in February 2021 and is not finished yet. It coincides with an ABC wave pattern of Elliott's Wave Theory. Despite this, it is likely that the price is near the end of this downtrend with the possibility of a new upcoming impulse. This is due to the fact that wave C of the ABC is forming its last wave 5.
It is possible to exploit two important inversion signals: the divergence between RSI and the price + the potential end of wave 5 close to the previous minimum, forming a double bottom. They are both important signals of inversion, but before opening a position, it is important to wait for the price confirmation.
How to play this trade? First, wait for the breakout of the static and dynamic resistances on the RSI. Once a candle closes above these levels, proceed with a market entry of half of the capital for this trade. Second, wait for the confirmation of the double bottom pattern. Set an entry with the remaining capital at around $30.5/31.
The first target is set at $40.5 with a 32.8% profit, which is the target point expected once the double bottom is confirmed. There could be a second target point, which is a potential confirmation of a triple bottom pattern, and should be set at about $60 with a ~100% profit.
It is possible to exploit two important inversion signals: the divergence between RSI and the price + the potential end of wave 5 close to the previous minimum, forming a double bottom. They are both important signals of inversion, but before opening a position, it is important to wait for the price confirmation.
How to play this trade? First, wait for the breakout of the static and dynamic resistances on the RSI. Once a candle closes above these levels, proceed with a market entry of half of the capital for this trade. Second, wait for the confirmation of the double bottom pattern. Set an entry with the remaining capital at around $30.5/31.
The first target is set at $40.5 with a 32.8% profit, which is the target point expected once the double bottom is confirmed. There could be a second target point, which is a potential confirmation of a triple bottom pattern, and should be set at about $60 with a ~100% profit.