Decoding Westlife: Market Rally and Anticipating the Next Move

Hello Traders! Today we're revisiting our analysis of Westlife from June 6, where we discussed the breakout of a Head & Shoulder pattern. Let's dive in!

  • On June 9, our suggested entry triggered at a retest of the H&S breakout at 825.
  • From that entry point, the stock rose to a level of 1024 by September 8 — a gain of nearly 27%.
  • This movement aligns perfectly with the Head & Shoulder target method. This method measures the vertical distance from the head to the neckline of the pattern. The same distance becomes our target from where the breakout happened.

Now, let's understand Shortening of Thrust (SOT):

What is SOT? SOT stands for Shortening of Thrust, which is a trading term that indicates potential trend weakness. It’s used to identify the end of moves. SOT is part of Wyckoff trading theory. Thrust refers to the distance between the current swing high to a previous swing high (in an uptrend) or swings low (in a downtrend). Increased thrust is a sign of potential trend strength. Shortening of Thrust is a sign of potential trend weakness.
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On the monthly timeframe, we can observe a Shortening of Thrust (SOT), a sign that the current uptrend may be losing thrust. The price is currently stopping at its daily EMA50 and the uptrend line. There's a chance for a pullback from these levels, but the odds are low due to the SOT observed on the monthly candle.

To summarize, if the price does not break above 1020 after a potential pullback, we may expect further weakening of the trend. If the price doesn't take a pullback from the current level, it could fall further as the monthly timeframe is showing weakness.

🔮 Possible Scenarios Ahead for Westlife 🎯

  • If the price pulls back from the current level and breaks above 1020, we may see further upside.
  • If the price doesn't pull back from the current level, we could experience a downward move due to the weakness shown in the monthly timeframe.

Please note that this article is purely educational and should not be taken as financial advice. Always do your own research and consult with a professional before making any investment decisions.

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