Its a clear swing trade . A bit of back ground here
1. The top and the sharp fall were both coming. You could have gone long either on Sept 24 or on 25, and ridden it to the dotted red line. Move a bit to the left and you will find that it has acted as a pretty strong resistance .
2. Price moved beyond the strong resistance, and stayed above it for a while. I'm convinced it is not a bull trap/ fake - out ( It could be , no one is
always correct ).
3. RSI(3) gave an extremely over-bought reading and price was miles away from the MA band. A sharp fall ensued.
4. RSI(3) reaches over-sold territory, price is within the first two MAs , there is a strong long term trend, and the dotted line showed only slight resistance on the way up , and showed no absorption on the way down. I'm looking to buy.
5. I bought intra-day on Friday, when the candle was a red one with an upper tail. I was confident ( or foolish, your choice ). The reversal candle today gives me more confidence to initiate fresh longs, with a stop just below today's low.
6. You can use a risk-reward ratio for a target, or even an ATR based target. I will hold till RSI(3) reaches oversold ( or SL is hit) and then trail stops, until I find a reversal candle, or resistance. This has kept me in many moves I initially thought were only swing trades , but turned out to be huge, almost linear bull moves.
TECHM
1. The top and the sharp fall were both coming. You could have gone long either on Sept 24 or on 25, and ridden it to the dotted red line. Move a bit to the left and you will find that it has acted as a pretty strong resistance .
2. Price moved beyond the strong resistance, and stayed above it for a while. I'm convinced it is not a bull trap/ fake - out ( It could be , no one is
always correct ).
3. RSI(3) gave an extremely over-bought reading and price was miles away from the MA band. A sharp fall ensued.
4. RSI(3) reaches over-sold territory, price is within the first two MAs , there is a strong long term trend, and the dotted line showed only slight resistance on the way up , and showed no absorption on the way down. I'm looking to buy.
5. I bought intra-day on Friday, when the candle was a red one with an upper tail. I was confident ( or foolish, your choice ). The reversal candle today gives me more confidence to initiate fresh longs, with a stop just below today's low.
6. You can use a risk-reward ratio for a target, or even an ATR based target. I will hold till RSI(3) reaches oversold ( or SL is hit) and then trail stops, until I find a reversal candle, or resistance. This has kept me in many moves I initially thought were only swing trades , but turned out to be huge, almost linear bull moves.
TECHM