JD has lost a third of its value in just over a month. Let’s take a look if we can pick the stock up over the next days.
Elliott: We are looking for a wave C with 5 sub-waves. We can count a completed 5-wave move to the downside now. Alternatively we expect one more wave to completion. These two interpretations give us two potential buy levels.
Geometry: Price bounced at the lower boundary of the upward channel, which is the .5 fib mark of the downward facing channel.
Oscillators: The RSI shows a bullish divergence. The Stochastic is oversold for over a month and due to move up.
How to trade it: The two levels (green arrows) give us excellent risk-reward ratios to try long positions with tight stop losses. The lower level at 54 is more likely to hold when we expect an expanded flat correction. JD needs to re-gain the 21 day MA and hold it in order to further increase long exposure safely.
Hi I'm new to trader, this looks like some good analysis but I'm struggling to fully understand what I'm looking at, would you be able to explain in a bit more detail (or dumbed down a bit :P). I had been watching JD for a inverse head and shoulders potentially forming off the current lowest low (i.e. looking for a bounce off the ~65.65 - 64.77 region in the next pull back). Would appreciate any opinions you have?
UnknownUnicorn12250317
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@Angus_Ed, Hi Angus, yes, a h&s pattern could form, let's see! I'm using channels or pitchforks to connect tops or bottoms. The extensions of those channels often become supports/resistances in the future. But it's important to add other indicators, I use oscillators, MAs and Elliott waves, to find confluence. Finally always use diversification and position-sizing. My goal is to be 'right' about 50% of the time, that's more than enough. A good risk-reward system, for example 2.5 : 1, makes it profitable.
Angus_Ed
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@Constellations, Thanks for the clarification. Ok great I can see now the relevance of each of the lines now! I'll go and do some additional reading on said oscillators. Looks like JD have had a very good morning so far, H&S would have/has missed the move! Hope you had a position on.