I haven't seen quite yet was I was hoping for the other day, and frankly a bullish case for NIo is starting to look worse and worse here. I am actually leaning more and more to the BEARISH side since analyzing the price action yesterday.
While we did make a nice retracement from the $12.20 spot I talked about in my last idea, we have not picked up enough volume on the retracement from the high to match up with the last bullish structure, to support a bullish case just yet. IF anything, the bearish retracement was verified, indicating a likely lower low is inbound. There is really not much room left for price to pick up buyers in the last bullish order block.
We still have one more order block for price/volume discovery, before the bullish case on NIO goes out the window, and we find ourselves with a critically broken structure to the downside.
Today's trading day will be a key day.
I am seeing a morning reversal to make a new low (OR a double bottom) at or below $12.15.
How I'm playing this:
PATIENCE IS THE KEY HERE.... Do NOT rush into a position today. Let price and volume show you what's going to happen.
-The last green bullish order block zone is the key: If we have LOW volume in that zone (we do NOT get to around the 72k volume high) AND we break below the low at $12.02. Wait for a double bottom low on the break, with low volume to enter into a 12/16 CALL with $12.50 or $12 strike and look for price to reverse back into the $13 range before we get a very strong bearish rally.
-IF we see volume at or above the key 72-74k range in that last green bullish order block, this is very bullish! Wait for price to retrace right below the LOW of the candle structure that produced the low right BEFORE the high volume candle on the 1 minute, and enter a CALL position (with same details as above), but we will be seeking price to go above $13.27 in this scenario.
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Do note that I will be selling my CALL options first thing in the morning that I was in from the $12.20 price yesterday. I expect it to be at or near the money at market open, and will be quickly going into PUT options to catch the move back down below $12.15.
FROM THERE I WILL WAIT FOR PRICE ACTION AND VOLUME TO TELL ME WHAT WILL HAPPEN!
Any thought on low volume across the market all week due to the Nov inflation numbers coming out on Tuesday and investors waiting to see how the Fed will react on Wed? I also noticed low volume but that was my thought as to why. China is starting to look like a very good buy opportunity (easing covid restrictions / coming out of a recession) and I think we have seen the low for the year. Thanks in advance
Zulu_Kilo
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@solidJaguar75495, I think volume overall CAN be a tricky deal. Volume for indexes is also tricky to look at because there are a lot of things it can say. It has to be looked at in the variable it's currently in.
For example, high volume within a trading range could mean reversal, but it could also mean that a structure was broken. Even on the upside, it could mean a reversal, or it could mean that demand was stronger than supply, especially on a breakthrough of a key level with high volume.
You can't just really take volume without context, because it won't have meaning.