Breakout trade opportunity, taking a position at a safe place. Stock has had a big rounding base pattern and has been on a downtrend for two years. We are now starting to see a possible early recovery. Looking to
False breakout has occurred over major resistance. Price action is retracing and I am waiting to enter around $28.10, where a few technical confluences come together.
• Level where recent volume profile peak occurs - likely to be supported.
• Fib retracement level 0.382
• Also pulling back toward the 50 moving average.
• At current levels, if breakout does continue, it could potentially run up to $31 quickly as this is a region of low volume profile node.
I expect that after this retracement, it will continue to move higher and break through the resistance level again. Taking a long 2.6R trade.
False breakout has occurred over major resistance. Price action is retracing and I am waiting to enter around $28.10, where a few technical confluences come together.
• Level where recent volume profile peak occurs - likely to be supported.
• Fib retracement level 0.382
• Also pulling back toward the 50 moving average.
• At current levels, if breakout does continue, it could potentially run up to $31 quickly as this is a region of low volume profile node.
I expect that after this retracement, it will continue to move higher and break through the resistance level again. Taking a long 2.6R trade.
Comment:
There is also a nice asymmetry setup in the 15m time frame. Falling Bullish wedge pattern. Break below $28.50 support level and it could fall further. This is level is also a low volume profile node so not a lot of volume activity in this price level. If support is held, it can potentially run back up, conservative 2R trade is my plan.
Trade active:
Took the trade on the 5 min timeframe - very hard to do while still being busy at work... Chased it a bit because of FOMO as it bounced off the 05 Fib level, entry at 28.64. If I stayed patient, would have had a better entry and hit my original entry target around 28.59 which was the VWAP level at the time.
Price today dropped briefly below the previous support level - support around the 28.50 level looks strong. However the more this support is tested, the more likely it will to fail eventually.
Wide SL @ 28.33, I realise now that Take profit @ 29.14 is an optimistic target in the 5min timeframe, needs to overcome a major resistance around 28.80, which also happens to be the edge of the vol profile pattern.
Having said this on the daily chart, structure still looks good (bullish).
Price today dropped briefly below the previous support level - support around the 28.50 level looks strong. However the more this support is tested, the more likely it will to fail eventually.
Wide SL @ 28.33, I realise now that Take profit @ 29.14 is an optimistic target in the 5min timeframe, needs to overcome a major resistance around 28.80, which also happens to be the edge of the vol profile pattern.
Having said this on the daily chart, structure still looks good (bullish).
Trade active:
Trade made, SL and TP levels updated.
Comment:
10.02.23 - Learning - this pullback was impulsive and gapped down below the previous resistance level and on high volume. Ideally to take the breakout trade entry - price should have consolidated around the previous res level and on low volume.