A classic set-up.
1.) What did I see?
A gap up and strong, wide-range first bar. The second bar is a narrow-range, inside bar; although it closes red, it forms a nice "hammer-like" candle.
2.) What is the entry?
A break of the second 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 after 2:30.
Set-up grade = B (it 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. NYX made a decisive break through the OR high on the third bar.
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Tags:
Trader-X, Stocks, Fibonacci, Candlesticks, NYX
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