Well most of you who have been friends with me or have followed me for quite some time now have noticed what the basis of my trading revolves around. Yes I use basic trading tools like moving averages & buy/sell volume, but the concrete mortar behind my trading is getting long/short into medium / long term trends. Time and time, I always look for the same setups regardless of the market I'm trading, whether its bonds, FOREX, commodity futures, or stocks. The setup is new highs / lows made - wait for a pullback - enter into a trade upon confirmation.
In this case, price action has broken the medium term downtrend on the weekly chart, and has broken the downtrend after falling below $35.00 on the Daily crossing back above its 50 Moving Average a while back. So what we have here is price made its way up to resistance at the $35.00 area and has subsequently pulled back to prior resistance turned support ($32.00 area). Once it got within that support area it formed a very small doji, but if you look at volume buyers were stacking up on each other thus making buy-side volume make a spike above the average selling volume. This the next day you had the bulls taking more control over price action forming the bullish candle. So I went long just before the candle closed. 1st target is roughly 38%-50% of the overall target (also below the 20 Moving Average), and the 2nd target is slightly below resistance.
Note:
-Price is above important moving averages (50, 100, 200)
-Bullish crossover of the 50 & 100/200 moving averages
-Also you may notice I really don't tend to name the specific candlestick pattern. Reason being because I really don't care about what it's called as long as I understand the price action behind the move. Just in case anybody was wondering why I never name the pattern by its name. But just for the heck of it, you have a sort of morning star (bullish) pattern that formed at support. And previously you have an inverted head and shoulders pattern which broke the medium term downtrend at the $30.00 area.
In this case, price action has broken the medium term downtrend on the weekly chart, and has broken the downtrend after falling below $35.00 on the Daily crossing back above its 50 Moving Average a while back. So what we have here is price made its way up to resistance at the $35.00 area and has subsequently pulled back to prior resistance turned support ($32.00 area). Once it got within that support area it formed a very small doji, but if you look at volume buyers were stacking up on each other thus making buy-side volume make a spike above the average selling volume. This the next day you had the bulls taking more control over price action forming the bullish candle. So I went long just before the candle closed. 1st target is roughly 38%-50% of the overall target (also below the 20 Moving Average), and the 2nd target is slightly below resistance.
Note:
-Price is above important moving averages (50, 100, 200)
-Bullish crossover of the 50 & 100/200 moving averages
-Also you may notice I really don't tend to name the specific candlestick pattern. Reason being because I really don't care about what it's called as long as I understand the price action behind the move. Just in case anybody was wondering why I never name the pattern by its name. But just for the heck of it, you have a sort of morning star (bullish) pattern that formed at support. And previously you have an inverted head and shoulders pattern which broke the medium term downtrend at the $30.00 area.
Trade active:
1st Long target has been met.
Trade closed: target reached:
2nd Target was reached.