1.) What did I see?
A gap down and weak, wide-range first bar. The second is narrow range and closes red. The third bar is narrow range (NR3), closes weak and leaves an upper tail/wick (bearish).
2.) What is the entry?
A break of the third bar low*.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's high to the opening range low; it was hit just before Noon.
Set-up grade = B (only because the entry was above the OR low)
*as with any entry below/above a previous high/low (in the case of my charts, the opening range (OR) high/low), you need to watch for resistance/support as price approaches those levels. If it stalls, you want to exit. If it breaks through, the odds are good you will have a move to the corresponding Fibonacci extension. CHK made a decisive break of the OR low on the fourth bar.
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Tags:
Trader-X, Stocks, Fibonacci, CHK
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