I am saving the chart from this failed trade so "hopefully" I'll remember the clear warnings next time. This is a C&H pattern and although the actual shape of the cup and the handle are OK, the volume is not quite right. There is a volume spike (10/5) way before the top of the cup line @113.00 and by the time price makes it to $113.00, the volume is quite low. Additionally, I do not see volume picking up as the handle line approaches $113.00.
Ideally, we want to see volume increase at the two high points ($113 in this case) AND we also want to see volume decrease at the two low points.
Here is a great example of a nice shaped C&H with perfect volume formation from Jamie's site (scroll down to the RIMM trade).
5 comments:
Anarco,
I see 3 things: today's market reversed at 11:15 with the CSCO warning =no wind at your back and 2) an above OR c/h in a touchy market 3) commodity/oil rally> like the nue stld ccj rig upgrades
i didnt do the exact clac's, but looks like you went appx @ a trader X 1.382 extension.
Thanks bl!
Those are excellent points.
Hi qqqball!
The 38% fib ext drawn from the low of the previous day to the ORH falls @114.30. I think that the lack of proper volume formation + the points pointed out from bl above are good reasons for the trade failing.
Have a good trading day today!
anarco
Nice trade and tech pt: the rounded top for shorting. Mkt reversal 4/15 hammer with coals, solar. There must be a group sequence/rotation, like steel up...coal up,
Post a Comment