FDX prepare to long when re-test demand zone AT 96.5 (under 100)
Waiting for re-test the demand zone to form a double bottom. Demand Zone 94 - 96 (6/24/2013 )
Use confirmation trading plan:
Price must down below 96.5, and should not close below 95.5, the low should not go down below 94.
When it goes up back to 96.5, use stop order or market order buy. If it will Gap up and not above 100.5, market order buy at open.
Stop: 93.95
Target1 is 120; Risk/Reward: (96.5-93.95=2.55)/(120-96.5=23.5)=1:9
Target2 is 140; Risk/Reward: (96.5-93.95=2.55)/(140-96.5=43.5)=1:17
If Gap up, market order buy before 100.5: Risk/Reward: (100.5-93.95=6.55)/(120-100.5=19.5)=1:3 -- "1:3" is the basic Risk/Reward ratio,otherwise it is not a good plan.
Check following Gaps:
G1: if the down trendline will be broken by a Gap, that shows the beginning of a new trend.
G2: if a Gap could jump above the 120 supply zone, that shows the trend is in middle, there is another 50% to 60% range after this Gap. we don't need to close this position, we just need to move stop below target1.
G3: if there is Gap into the 140 supply zone, that shows the trend near end. This will be an exhausted Gap. we need to close this position.
If we will see these Gaps, or one of them, that could be used to estimate the trend range, and to verify the trend strength.
Use confirmation trading plan:
Price must down below 96.5, and should not close below 95.5, the low should not go down below 94.
When it goes up back to 96.5, use stop order or market order buy. If it will Gap up and not above 100.5, market order buy at open.
Stop: 93.95
Target1 is 120; Risk/Reward: (96.5-93.95=2.55)/(120-96.5=23.5)=1:9
Target2 is 140; Risk/Reward: (96.5-93.95=2.55)/(140-96.5=43.5)=1:17
If Gap up, market order buy before 100.5: Risk/Reward: (100.5-93.95=6.55)/(120-100.5=19.5)=1:3 -- "1:3" is the basic Risk/Reward ratio,otherwise it is not a good plan.
Check following Gaps:
G1: if the down trendline will be broken by a Gap, that shows the beginning of a new trend.
G2: if a Gap could jump above the 120 supply zone, that shows the trend is in middle, there is another 50% to 60% range after this Gap. we don't need to close this position, we just need to move stop below target1.
G3: if there is Gap into the 140 supply zone, that shows the trend near end. This will be an exhausted Gap. we need to close this position.
If we will see these Gaps, or one of them, that could be used to estimate the trend range, and to verify the trend strength.
Order cancelled:
Gap down to 92, Lower than the stop.