July wheat futures beautifully bounced off of a 78.6% Fibonacci retracement and rose sharply. It paused at the most recent swing high and began a consolidation that looks like a little rounded bottom. It could be the beginning of a J-hook forming.
Now that the 8ema has reached it, we could be seeing the beginning of support for a springboard higher.
Above is a weekly and a daily chart. There are 4 bullish observations written on the daily chart.
I entered at 565 3/4. It is probably a little too early. Would have been a safer trade if I had waited for a close above the high at 571 1/2. Or even safer than that if I waited to close above the recent weekly swing high at 589. But entering lower does reduce the loss if the Stop is hit. Placed the Stop just under the consolidation at 550.
The J-hook projection is coincident with the previous highs and the 127.2% Fib extension. Set the target just below the 127.2% Fib at 621.
Risk = 565 3/4 - 550 = 15.75 * $50 = $787.50.
Reward = 621 - 565 3/4 = 55.25 * $50 = $2762.50.
R:R = 1:3.5
No comments:
Post a Comment