This trade is based upon the following technical factors that we can potentially see from the 4H chart:
2. Resistance at the 61.80 fib retracement
3. Decrease in with an increase in price
4. Upper monthly rising is within close proximity which could act as another level of resistance if we push higher in the
5. Diagonal Wave pattern - although this isn't a perfect formation, it is still a factor to consider
This trade is based upon the following fundamental factors:
1. The Fed can only do so much and most of the economic damage is still unknown
2. Much of the recent bull run, dead-cat-bounce or correction is now in what I believe to be the hysteria phase with no backed up reason as to why its still going up
Of course we can't dismiss the possibility of the continuation to the upside. The cases of COVID-19 are now getting lower each day and it appears that we are over the worst. This could be the reason for so much recent buy in.
The trade entry will be based upon a breakout and close below the formation. The SL for this trade will be above the 61.80 fib retracement and above the breakout area in case we get a re-test. The TP level will be targeted for the lower descending which could act as a double-bottom within this price range of the recent lows. The entry and SL are variable depending on where we breakout of this formation therefore I won't be providing precise trade details other than the position in this chart.