I mentioned IP yesterday.
1.) What did I see?
IP was showing multiple GREEN flags! A gap up and very wide-range first bar that closed weak. But, the second bar rallied and closed strong (note how the second bar's green "real body" offsets much of the first bar's red "real body"). The third and fourth bars continue to narrow in range and form inside bars, with the fourth bar the narrowest range of the morning. You also see the second, third, and fourth bars print higher lows (many of you will see a wedge pattern here).
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 two bars later.
Set-up grade = B; the entry was below the OR high.
*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. IP broke through the OR high on the fifth bar.
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Tags:
Trader-X, Stocks, Fibonacci, IP
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