I know several of you took this trade - I received my third email about it this morning. It is a little "out of the box" in relation to trades I post on the blog...here is my analysis:
1.) What did I see?
A gap up and weak, wide-range first bar. The second bar shows strength but leaves an upper tail. The third bar also shows strength as it rallies to the opening range high, but also leaves an upper tail/wick. The fourth bar is narrow-range, an inside bar, and closes strong one cent shy of the opening range (OR) high. MFE has now completed what I refer to as a "U" turn and it will either break-out here or sell off at resistance from the OR high. It is a low risk entry as long as you are prepared to exit the position with a small loss if it stalls at this resistance.
2.) What is the entry?
A break of the fourth bar high.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's low to the opening range high; it was hit around 2:00.
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