XLE Prepare to long, analysis of conformation entry
Existing Condition:
1. Downtrend line was broken by breakaway Gap (G1). Start a new trend.
2. Gap Up above SMA50
3. double bottom reversal pattern confirmed Weekly demand zone in 11/28/2003;
Use Fib number + simple moving average (SMA) + demand zone (DZ) to verify entry point:
1. 0.382 retracement, DZ1, If price raises above 29 (SMA8)
or
2. 0.5 retracement, DZ2, If price drops below 27.1, and back to above 27.2
or
3. 0.618 retracement, DZ3, If price drops below 26.1, and back to above 26.2
or
4. G2: Gap UP above (SMA50) 29.3, market buy at open.
This is the most strong signal. (See the result after G1 Gap)
The target Size is based on the entry point:
DZ1 to SZ1; DZ2 to SZ2; DZ3 to SZ3;
According to this image, I would long calls of XLE/XOP/ERX, buy PUT of ERY;
I will create another trading plan with detailed Stop/Entry/Target (S.E.T) when one of these conditions could be triggered.
1. Downtrend line was broken by breakaway Gap (G1). Start a new trend.
2. Gap Up above SMA50
3. double bottom reversal pattern confirmed Weekly demand zone in 11/28/2003;
Use Fib number + simple moving average (SMA) + demand zone (DZ) to verify entry point:
1. 0.382 retracement, DZ1, If price raises above 29 (SMA8)
or
2. 0.5 retracement, DZ2, If price drops below 27.1, and back to above 27.2
or
3. 0.618 retracement, DZ3, If price drops below 26.1, and back to above 26.2
or
4. G2: Gap UP above (SMA50) 29.3, market buy at open.
This is the most strong signal. (See the result after G1 Gap)
The target Size is based on the entry point:
DZ1 to SZ1; DZ2 to SZ2; DZ3 to SZ3;
According to this image, I would long calls of XLE/XOP/ERX, buy PUT of ERY;
I will create another trading plan with detailed Stop/Entry/Target (S.E.T) when one of these conditions could be triggered.
Trade closed: target reached:
According to this Projection, I traded ERX calls in Apr. And Closed today 6/9. A big winner.