Here price action is showing a higher low and creating an Inverse Head & Shoulder pattern. The down trendline is plotted on the H4 timeframe and still indicates a downtrend. However, we can see that there is enough room for the iH&S pattern target projection to be reached. The up trendline connecting the head and right shoulder creates a triangle pattern so I will consider all possible moves the price can make, read the candlesticks around area of importance, and look for momentum increase before price intersect lines to help me anticipate price direction. I use candlesticks to gauge bearish/bullish momentum.
Comment:
Breakout with momentum and then the price started to hover around the 18.46 area. The trend on the H4 tf is till bearish. This is a counter trend trade and trading against the trend you should stay on top of your game, as the price can at any moment start moving in the direction of the major trend.
Comment:
On the chart you can see that the first target (smaller up arrow) was reached after the neckline breakout. This target is the distance from the right shoulder up to the neckline projected above the neckline. I always advise my learners to manage their trades, and take some profits off the table by partially closing an open trade at levels of importance.
Comment:
price reached second higher target, downtrend line from a higher timeframe. Price intersected this downtrend line, pulled back to breakout line but bears was not strong enough. Bulls stepped in and pushed price even higher. With my profit enhancing technique I use a trailing stop-loss to follow price higher.