Contrary to what the loudest Karp fanboy is saying, this stock (and other similar ones... QS, SPCE, CCIV) are still correcting. But there's plenty of opportunity to make GAINS.
I show a clear 5 waves down which would be completion of A to the 786 retracement. You broke divergence which is more evidence of a C leg down. Clear EW subdivision shown.
Right here we see an inverse Head and Shoulders pattern forming. NO - iH&S does not always mean bottoming pattern, it is just something to look for to know how to trade the neckline. In this case, we are anticipating it to serve as the bottom but FYI HS and iHS is never absolutely a bottoming/topping pattern.
We anticipate the nearest high before the head to serve as the neckline. We see that w3 failed to hit the 1.618 extension, so we don't expect w5 to hit the 2.272. However, we notice it failed to hit even the 2.0. For this reason, I wouldn't be surprised if we poked above the neckline for a relative high up near $27. But we don't care. We are not long currently, and not interested in longing with this type of uncertainty and RR.
What we are interested in longing on a retracement which we would expect with the completion of this impulse. Keep note of the inverse HS pattern with defining neckline and slope to to serve as reactionary points. Sometime you get false breakdowns of the iHS because everyone is watching it. I expect something similar, but will continue to monitor/update as subdivision plays out for this small ABC. Target $23 for a retrace to land on top of a pretty critical defining channel line (red). SL at $21.50 marked by critical price level (somewhat critical, somewhat arbitrary... need to define the trade some way to stay diligent).
For this last leg, I really like the $30 target as you have a critical price level. There's also confluence by the 618 extension. However, typically we see ABC's play out to the 1-1.272, so that target is also listed near $33. It's going to take a lot of momentum to get up there. Targeting $30 gives a 4:1 RR which is favorable. Playing this with normal shares because why would you need more than a 25% gain capped at ~6% loss?
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Trade idea closed. Never took an entry. Let er rip!
Wow, great explanation!!! Thank you.
Do you play sub waveA (and take profit at B) or wait for confirmation for waveC to trade?
warrenbudget
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@HHSPN, thank you. It really depends on the setup. If you have a lot of evidence that the bottom is in, you can trade the first first of any structure. Take a look at my QS post here where we accurately traded the relative bottom for a 20% gain. I like seeing a wedge and strong ew evidence if I take a sharp pivot on the first leg.
Clicking this link here will show u the evidence I like to see to pick a bottom or top
warrenbudget
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@HHSPN, but here we traded the second leg up after watching the retrace on CCIV for 20% gain. It trended closely with QS but this setup was cleaner for that next wave.
warrenbudget
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Trade idea closed. Not shaping up to be the ihs pattern and instead looks to continue very bullish. Aiming for $29 before any significant pullback. Did not take an entry here for the swing trade but Goodluck to those who sticking with the longs! Have some in the long term hold bag so looking forward to seeing those appreciate.
R5turbo2
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I don't see spce going down very much. I think that we are in holding pattern at this time with spce. Not a fan boy I am an investor.
warrenbudget
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@R5turbo2, I've noticed you spent quite a bit of time going thru every SPCE tagged post and typing a very similar comment. But you don't post any charts. What holding pattern are you referring too?? I am too a long term holder since $16. I could see a move up to $40 similar to what I have as an alternative leg up for pltr but ultimately looking for a pullback. What do you think of the gap at $22 range for spce? Some substance would be appreciated.