1. Gap down from support.
2. Triple EMA breakdown prior to the gap.
3. Close below 11 as it completes the H&S pattern that formed
(AGI analysis dated Jan 19 http://the-morningstar-option.blogspot.com/2011/01/alliance-global-group-agi.html#comments).
Had you faded the gap, the best you could have gotten from the trade is 5.94%. That is if you got the exact low and high of the leg.
However, it appears to be forming a bullish RSI divergence on the daily chart. A close higher than today's closing will confirm the bullish divergence, suggesting a short term rally to 10.31 up to 10.63 and 11.10 as the best case scenario.
It could rally, it could not and I am not willing to place my bet on this one.
Also, the minimum short term target isn't enough to justify the trade so I wouldn't touch this one yet.
I'd wait for a bullish RSI divergence on the weekly charts in the mean time.
To the next trade!
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