Growthpoint is showing 2 opposing scenarios, a bullish downward slopping parallel channel depicted by the pink lines and a bearish rising parallel channel depicted by the black lines. Price fell out of the rising parallel channel and is now backtesting it from below where it meets the 30 week moving average, if we convert the chart to a daily timeframe we see that the black line is nearly converging with 200 day moving average. Since price is within timing band for a daily cycle high, we can expect a pullback that would reset the indicators before moving higher to overcome the 200 day moving average. It is worth noting that price has confirmed a weekly cycle low by closing above the pink downward slopping line.
Stop-loss: We will be watching where price settles into a daily cycle low, that price becomes a stop-loss in the event that price goes lower than it. This would signal that trend has resumed a bearish view with higher probability we will go lower than R11.29.
Tip When drawing channels or support lines, try to project them well into the future. This will give a guide on areas where to expect price to consolidate or change course. Areas of intersecting lines tends to attract price & provide a turning point, these make good profit taking or short entry points.
Stop-loss: We will be watching where price settles into a daily cycle low, that price becomes a stop-loss in the event that price goes lower than it. This would signal that trend has resumed a bearish view with higher probability we will go lower than R11.29.
Tip When drawing channels or support lines, try to project them well into the future. This will give a guide on areas where to expect price to consolidate or change course. Areas of intersecting lines tends to attract price & provide a turning point, these make good profit taking or short entry points.
Trade closed: stop reached