Went long Feb Live Cattle Futures (LE) from 113.025. It's $400/pt.
Here's what I saw:
- Bounce off the 61.8% Fib retracement of the yellow range.
- Bounce off 200sma.
- Bounced off 1st AB/CD (thick yellow slanted line segments) in an uptrend.
- Possible Gartley pattern.
- Morning Star like candlestick pattern.
- Doji gap up.
- Closed above 8ema and 50sma.
- Above all MA's.
- High volume.
- Stochastics are mid-range; plenty of room to run.
Target white (thick slanted line segments) AB/CD = yellow 27.2% Fib Extension = 118.145.
Stop just under bottom of the candle at 111.00.
Risk: 113.025-111.00=2.025*$400/pt=$810
Reward: 118.145-113.025=5.12*$400/pt=$2,048
R:R=2.025/5.12=1:2.53
Anything can happen but this looks like a good setup. What worries me the most about this trade is that we'll most likely have to wait out Thanksgiving, the low volume Friday after, and the weekend after that.
We would need some big candles to avoid holding over the 4 day weekend coming up. Today's close is 112.90. Se we need to go 118.145-112.9=5.245 points to hit the target. Look at the size of the green up candle on 10/29/20. The open was 107.650 and the high was 110.650, so the difference is 3.0 points. We have 2 trading days before Thanksgiving. If we got 2 of those candles, 3+3=6 and 6>5.245. So, 2 of those candles would hit our target, without the need for any gap ups. But this is definitely hopeful thinking and not very likely. But not impossible. We shall see.
No comments:
Post a Comment