Thesis: price has been trending up, then consolidates inside a down-sloping/neutral channel (the white rails). Each touch into the lower rail tests and absorbs liquidity. By the third touch (“Phase 3”) the supply sitting along that rail is thin; when price holds/reclaims that rail, the path of least resistance flips up and we often see a push to a higher high.
What the pattern is showing
Impulse → Channel: After an advance, price pulls back in an orderly channel (a bull flag/descending channel).
Touch 1 & 2: First two taps validate the rail and define the slope. Liquidity resting on that line gets partially absorbed each time.
Phase 3 (now): The third tap tags the same demand rail near $2.92 and rejects. Shorts leaning on that line are vulnerable; a reclaim sparks stop-outs + breakout flow.
Structure shift: Pushing away from the lower rail typically breaks the most recent lower-high inside the channel, turning structure back to HH/HL and opening the door to a run toward/through the upper rail.
Why this entry is attractive
Validated level: You’re not guessing—the lower rail is proven by multiple touches.
Asymmetric risk: Risk is defined just below Phase-3 low / below the rail; upside is to the upper rail first, then new highs if the channel breaks.
Liquidity mechanics: Each test removes sellers; the third test often doesn’t have the inventory to push through, so the bounce has fuel (short covering + breakout buyers).
Volatility-aware: In my system the rail slope is normalized (ATR-scaled around your 16.6 “feel”), so the same “reversal touch” behavior shows up across symbols and sessions.
How I’m thinking about it
Trigger: Either (a) the Phase-3 bounce off the rail holding above ~$2.92, or (b) a close back above the most recent intra-channel lower-high (conservative).
Invalidation: A decisive close below the rail/Phase-3 low (the idea is wrong if demand doesn’t defend the level).
Targets:
T1: Upper rail of the channel.
T2: Prior swing high / new HH if the upper rail breaks (measured-move of the channel width is a common extension).
Bottom line: Phase 3 is “go” because it’s the third test of a validated demand rail inside a bullish context. That combination (validated level + thinning supply + structure shift) consistently produces the higher-high leg this setup is built to catch.
(Not financial advice. I’m trading the pattern as described with clear invalidation below the rail.)
What the pattern is showing
Impulse → Channel: After an advance, price pulls back in an orderly channel (a bull flag/descending channel).
Touch 1 & 2: First two taps validate the rail and define the slope. Liquidity resting on that line gets partially absorbed each time.
Phase 3 (now): The third tap tags the same demand rail near $2.92 and rejects. Shorts leaning on that line are vulnerable; a reclaim sparks stop-outs + breakout flow.
Structure shift: Pushing away from the lower rail typically breaks the most recent lower-high inside the channel, turning structure back to HH/HL and opening the door to a run toward/through the upper rail.
Why this entry is attractive
Validated level: You’re not guessing—the lower rail is proven by multiple touches.
Asymmetric risk: Risk is defined just below Phase-3 low / below the rail; upside is to the upper rail first, then new highs if the channel breaks.
Liquidity mechanics: Each test removes sellers; the third test often doesn’t have the inventory to push through, so the bounce has fuel (short covering + breakout buyers).
Volatility-aware: In my system the rail slope is normalized (ATR-scaled around your 16.6 “feel”), so the same “reversal touch” behavior shows up across symbols and sessions.
How I’m thinking about it
Trigger: Either (a) the Phase-3 bounce off the rail holding above ~$2.92, or (b) a close back above the most recent intra-channel lower-high (conservative).
Invalidation: A decisive close below the rail/Phase-3 low (the idea is wrong if demand doesn’t defend the level).
Targets:
T1: Upper rail of the channel.
T2: Prior swing high / new HH if the upper rail breaks (measured-move of the channel width is a common extension).
Bottom line: Phase 3 is “go” because it’s the third test of a validated demand rail inside a bullish context. That combination (validated level + thinning supply + structure shift) consistently produces the higher-high leg this setup is built to catch.
(Not financial advice. I’m trading the pattern as described with clear invalidation below the rail.)
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.