As we have noted in prior published analysis, often price targets are very close to or at exact reaction levels, as traders and investors reduce or add to their positions. The area identified as Target 2 ITL Swing Long is a good example of this phenomenon. The approximately $30 pullback that occurred after the 2nd target was reached coincided with another Intraday Long setup that is racing toward its' 3rd target. Target 3 ITL Swing Long is about $5 away from meeting its' price level as we write.
If price reaches the 3rd target, we will expect a reaction as the Long position traders/investors on the higher time-frame will normally be exiting some of their positoins awaiting an opportunity to re-enter at a better price. Shorts will also see this as an opportunity to add to their positions. However, the Long Term Trend traders/investors will not be exiting their positions at this level.We have identified, though not shown on this chart, the level they are awaiting and it is still a nice move higher up on the chart.
Even though price has continued to rise as expected, note the reaction as price approached the Short Term Short entry range. On a price appears to have ignored this area but the smaller time-frame chart tells a different story. By zooming in we see a reaction for more than nine 1 hr candles that clearly demonstrates that many traders and investors were in fact watching and reacting to this level.
As price nears the failure level of this short setup, we can expect more shorts to add to their positions. If this short fails, we will expect extended short covering as the shorts await the next short entry range to re-enter in expectation of a pullback. Keep in mind as always, this analysis of what will occur at these levels only apply to the positions being traded on this particular time-frame.
Number 1 on the chart is the starting point for the most recent series of 6 Intrady longs which were identified for our clients that have all hit their 1st and 2nd targets. There have been 7 nicely profitable Intraday counter-trend shorts identified for our clients during this same Intraday period.
As we stated on the previously published chart, the expected new all time high has been reached and all short positions at this time have the added risk of having no prior history to analyze. Our proprietary analytical method is not based on studies or indicators and will continue to be accurate even when new highs or lows are reached.
See our other published charts for examples of how accurate our analysis is.
Trade the chart and trade safe.