The US market opens in 10 minutes, and I'm gonna watch for the open. A strong gap down cancels the trade. With my risk management rules and my portofolio size, I can buy 100 shares of AT&T . The stop loss will be under the current low. I'm going to close half of the position at take profit 1, and move the stop loss on break even (including the commision costs) on the remaining 50 shares. If we close over the last swing high, that is 33.50$, I will move my stop loss at the last swing low on the hourly chart. If we reach 35$, I'm going to close the entire position.
Technically, we have a class B (the third one) both on the lines and the histogram. with strong . Also, the support line at 32$ is a very strong weekly support.
My fundamental knowledge is really bad, and usually I don't read newspapers or online sites, so I'm glad you brought some fundamental insight. I tried once to read a macroeconomic book and I just couldn't. I know I have to step up a bit.
About volume, well I have big problems here. In technical analysis books, well, they just say the basics, and I couldn't find a proper study or a book that concentrates on volume. If you know something please recommend, I really need it.
Regarding the price target, I'm not confident either that AT&T can get to my second take profit, that's why my plan is changing the stop loss to breakeven (including commisions) at the first take profit, for the remaining position. From what I've seen until now, Double Tops or Bottoms don't really brake the immediate support or resistance in order to reach their final target.
Lastly, about the bullish engulfing, yes I know it's not the proper pattern, but I bend the rules a bit if I spot in the past similar patterns. Please have a look at these dates 09/10/2013 ; 25/10/2013 ; 18/12/2013. There is no gap down, but look at the rallies that followed. They are very similar, almost engulfing patterns such as the current one. Unfortunately, there is a bearish engulfing formed today, with a gap up and a close below previous candle, so the trade might not work.