Potential Head and Shoulder Bottom pattern forming:
Pattern checklist:
Price Trend- down leading to pattern (+)
Shape- 3 valley pattern with middle valley below the others (+)
Symmetry- two shoulders should be near the same price (+, ->6300), same distance from head (-, not really, right shoulder about 7 days from head whereas left is bout 3 days)
Volume- should be highest on left shoulder, diminished on right shoulder (possibly, too early to tell)
Confirmation- when price breaks upward through neckline (6800)
Target- compute height from head low to neckline (1000) and multiply it by percentage meeting price target (74%) and add it to the breakout price (6800) = approx $7540
(all pattern info from thepatternsite.com)
R/R= 2.51
(risk/reward ratio)
fyi, because I'm not convinced about the symmetry or the R/R, I'm going to scale the entries on this one between the current shoulder at 6300 (.5 fib) and the .786 fib.
Pattern checklist:
Price Trend- down leading to pattern (+)
Shape- 3 valley pattern with middle valley below the others (+)
Symmetry- two shoulders should be near the same price (+, ->6300), same distance from head (-, not really, right shoulder about 7 days from head whereas left is bout 3 days)
Volume- should be highest on left shoulder, diminished on right shoulder (possibly, too early to tell)
Confirmation- when price breaks upward through neckline (6800)
Target- compute height from head low to neckline (1000) and multiply it by percentage meeting price target (74%) and add it to the breakout price (6800) = approx $7540
(all pattern info from thepatternsite.com)
R/R= 2.51
(risk/reward ratio)
fyi, because I'm not convinced about the symmetry or the R/R, I'm going to scale the entries on this one between the current shoulder at 6300 (.5 fib) and the .786 fib.
Comment:
I'm still overall bearish, fyi. The spread between longs and shorts will add more fuel to the next move down. If this pattern plays out we may get a lot of late longs piling on then and we can finally get to our capitulation.
Trade active:
.705 OTE was my heaviest buy and snagged perfectly.
Comment:
pulled up stops. closed one long here to preserve some profit in case we re-test support. since risk is now zero on open positions and pattern is confirmed, will add to positions on next re-test of support.
Trade closed: target reached:
no re-test of support, target reached.
looking bullish for the next few days/weeks, but this trade has concluded.
looking bullish for the next few days/weeks, but this trade has concluded.