Today's price action went up to and tested the 50sma, then went down and tested the Trend Line, and rose up and closed above the 3ema and 8ema, resulting in a Doji candle. The second Doji in a row. A Doji candle signifies indecision.
We're currently caught in a bobble (term credited to Steven Bigalow of Candlestickforum.com) between the 50sma and the Trend Line. This can continue for several trading days. Normally it would eventually break out to the upside or the downside. However, we've been in a consolidation for weeks. So maybe we just continue to get more of the same. Indeed, you can see the Bollinger Bands and Keltner Channel are pretty flat.
But if you look at the consolidation you can see we're already near the top of it. So, if we break out to the upside, we'll clear the 50sma and most likely clear the consolidation range. The past 3 days we closed over the 8ema, which favors a break to the upside, if we get a break out.
And there is still plenty of room in the Stochastics before we have to worry about being over bought.
If we do get a breakout to the upside, it would be normal to get a small retracement back to the breakout level, then a resumption of the original breakout direction. In this case, the breakout level is the 50sma and/or the top of the congestion. A retest of this type would be a stronger pattern then just meandering all the way up to our target because once the support level is "proven", traders can have more confidence in the breakout, rather than worrying about when the up move will reverse.
Unfortunately, for our mental health, tomorrow is a Friday, which can be a quiet trading day. So we'll probably have to wait until next week to see if we get a definitive break out.
I feel like I should add a reminder that all of my analysis and expectations are my opinion.
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