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Thursday, January 25, 2007

CHL - 012507; 15-minute chart

1.) What did I see?
A gap down and attempt to rally with the first three bars. The third bar leaves a long upper-tail at the declining 5MA, and the fourth bar is weak and falls back to the OR low. Price consolidates at that level for the next five bars, and the ninth bar forms a "hanging-man" type candle right on the OR low (the close of the candle = the OR low).
2.) What is the entry?
A break of the ninth bar low.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's high to the OR low. It was hit after 2:00EST.

Set-up grade = "B-"; only because the entry was not below the OR low. I marked a second entry on the chart which was a weak bar with a long upper-tail below the OR low - that entry was an "A"!

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estocastica said...

Nice one X.

David said...

The 5MA is great. Thanks for sharing and turning your readers onto it. You are very selfless!

Todd said...

Good trade. I notice more 15-minute charts lately. Is that your focus as of late?

Thanks for a great blog.

John M. said...

Great short. If I could just find a few of those a week, I would be set.

Anonymous said...

John, there are usually multiple setups like CHL everyday. If you follow X's advice about focusing on one setup, this is a good one to choose.