BLUE - Short
I. Analysis
1. Stock has been trading in a shot term uptrend within the highlighted channel
2. Stock has now hit a value zone, the upper edge of the channel
3. A bearish engulfing pattern has been form at this area. This candle's size is abt 1.3 x 1 ATR, giving it relevance
4. Note that a short position is a countertrade play, meaning the trade management must be very tight
5. Risk/Reward ratio is not ideal
II. Trade
1. Entry next candle
2. SL at 71. Prefer to give it some buffer and set the stop loss at 1 ATR above upper edge, but price hitting 71 would pretty much destroy the idea of this trade
3. Tp at next swing low. A conservative approach in taking profits here is advisable
Cheers
Ruben
1. Stock has been trading in a shot term uptrend within the highlighted channel
2. Stock has now hit a value zone, the upper edge of the channel
3. A bearish engulfing pattern has been form at this area. This candle's size is abt 1.3 x 1 ATR, giving it relevance
4. Note that a short position is a countertrade play, meaning the trade management must be very tight
5. Risk/Reward ratio is not ideal
II. Trade
1. Entry next candle
2. SL at 71. Prefer to give it some buffer and set the stop loss at 1 ATR above upper edge, but price hitting 71 would pretty much destroy the idea of this trade
3. Tp at next swing low. A conservative approach in taking profits here is advisable
Cheers
Ruben
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.