Citi Group Gartley Pattern - Update 5

We gapped up at the Open, filled in the gap and tested the 3ema. Then we reversed upward and closed over the previous Close. And we made a higher high and higher low compared to the previous trading day.

Even though we have a red candle body today, it was clearly a Bullish day. Definitely wanted to hold the position.

However, the Earnings Report (ER) is in 4 days. Our options should have increasing Implied Volatility (IV) due to the approaching event as well as the overall market dynamic activity. Option Gamma should also be increasing. These are Bullish for option pricing. But Theta time decay is also increasing, Stochastics are very overbought, and traders may want to sell ahead of the ER to capture their recent profits. These are Bearish.

So, while I seldom use Stop Losses on options, today I added a Stop Loss at break even on our position.

Citi Group Gartley Pattern - Update 4

Above is a wide view and zoomed in view of the Daily chart. We had a continuation day in our favor, which is good, but I'm becoming concerned about the overbought Stochastics. I mentioned it last time as well.

Our Target of 71.62 is on the other side of the 200sma. The 200sma could easily provide enough  resistance on its own to send us back down for a retrace before reversing back up. But combined with the Stochastics being overbought, its even more likely. 

This would be problematic because the Earnings Report is on 1/14/2022 before the market opens, which means we need to exit by the Close on 1/13/2022. A reversal could have us down significantly right when we have to exit.

So, considering this situation, I think I'll exit this position if we hit the 200sma instead of waiting for the .618AD Gartley Target. The 200sma at today's close is exactly 70.00. 

Citi Group Gartley Pattern - Update 3

Excellent day for our long position. We gapped up and formed a Trend Kicker candlestick pattern. Then we closed over the 50sma on good volume. Also notice how well the Bollinger Bands are blossoming. All Bullish indications.

We're nicely on track. The only thing that's concerning is how high the Stochastics are. The Stochastics recently pinned on the bottom side from Dec. 1st to Dec. 21st, so why can't it pin on the upside for us now?

Citi Group Gartley Pattern - Update 2

Well, we certainly didn't make a higher high lol. We did open gapped up, but the Federal Reserve FOMC Meeting Minutes came out at 14:00 ET, and down we went, continuing to bounce off the 50sma. But, we stayed above the 3ema and closed right on it. And today's volume was less than the past 2 days. No need to exit the trade based on today's price action.

The equity markets went down on the prospect of higher interest rates, but higher interest rates help banks be more profitable by increasing their Net Interest Margin (NIM) (see https://www.investopedia.com/terms/n/netinterestmargin.asp#toc-what-is-net-interest-margin). But I don't want to get into fundamentals. I'm a technical trader and want to stay that way. Only bringing this up to say, I'm not ready to give up on this trade yet.

Citi Group Gartley Pattern - Update 1

We gapped up above the Trend Line, continued higher but rejected off the 50sma and closed the gap. Nothing in this price action violates our Bullish thesis.

It's constructive that we closed right on the Trend Line vs below it. My expectation is we make a higher high tomorrow. Held the long position.