Volatility into and on its earning day is a trading opportunity
I used my biased Fibonacci channel to determine a stock major trend, minor oscillations, as well as entries/exits from trading.
The Fibonacci channel is a technical analysis tool that is used to estimate support and resistance levels based on the Fibonacci numbers. It is a variation of the Fibonacci retracement tool, except with the channel the lines run diagonally rather than horizontally. The lines from the channel is used to aid in identifying where support and resistance may develop in the future. If the uptrend is expected to continue, the 100%, 161.8%, and other higher levels are potential price targets. The same concept applies to downtrends if a downtrend is expected to continue. In an uptrend, the zero-line is like a normal trendline, helping to assess the overall trend direction. If the price falls below it, it may need to be adjusted based on more recent price action, or it could signal that the uptrend is over and that the price is breaking lower. In a downtrend, the zero-line also acts like a trendline. When the price is below it, it helps confirm the downtrend. If the price moves above it, the indicator may need to be redrawn or the price is moving higher out of its downtrend.
Fibonacci channels are highly subjective. The trader chooses three points they deem to be significant, yet the market may not view these points as significant and thus may not respect or react as expected to the drawn levels. One of the complaints with Fibonacci analysis, in general, especially on short-term charts, is that there are so many levels that the price is likely to reverse at or reach one of the levels. The problem is knowing which level will be important in advance.
The Fibonacci channel is a technical analysis tool that is used to estimate support and resistance levels based on the Fibonacci numbers. It is a variation of the Fibonacci retracement tool, except with the channel the lines run diagonally rather than horizontally. The lines from the channel is used to aid in identifying where support and resistance may develop in the future. If the uptrend is expected to continue, the 100%, 161.8%, and other higher levels are potential price targets. The same concept applies to downtrends if a downtrend is expected to continue. In an uptrend, the zero-line is like a normal trendline, helping to assess the overall trend direction. If the price falls below it, it may need to be adjusted based on more recent price action, or it could signal that the uptrend is over and that the price is breaking lower. In a downtrend, the zero-line also acts like a trendline. When the price is below it, it helps confirm the downtrend. If the price moves above it, the indicator may need to be redrawn or the price is moving higher out of its downtrend.
Fibonacci channels are highly subjective. The trader chooses three points they deem to be significant, yet the market may not view these points as significant and thus may not respect or react as expected to the drawn levels. One of the complaints with Fibonacci analysis, in general, especially on short-term charts, is that there are so many levels that the price is likely to reverse at or reach one of the levels. The problem is knowing which level will be important in advance.
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Most IBM traders expect a drop from its earning?
No additional negative news may generate significant bullish momentum on trading its earning report.
No additional negative news may generate significant bullish momentum on trading its earning report.
