Make sure you read the first two posts - and the comments in each - before you read this one.
On this chart I show the other indicators I use which - in conjunction with Fibonacci lines and candlesticks - make up my repertoire. I have removed the Fibonacci lines so you get a clean view; on the chart you see:
1.) 8 period EMA
2.) 100 period EMA
3.) A black horizontal line representing a "whole number" as Tom C. calls it - in this case, $27. Refer to some of Tom C's previous posts for the importance of watching these dollar levels for support and resistance.
4.) A red horizontal line representing the Pivot Point (calculated using the standard pivot formulas in my software package).
As you can see, the first three candles print strong green bars and rally through the moving averages, the pivot line, and the $27 level. Price then pauses and pulls back to test those levels and is met by a rising 8EMA. The hammer-type candle forms, and the rally continues. If you remember from the previous post, looking at the Fibonacci lines you have a valid "beyond the Fibonacci extension" setup with price testing the FE as support. If you are keeping count that is five areas providing support for price to rally.
I will make another post in the next day or two answering questions from comments and documenting any other thoughts on this trade. But I encourage you to go back and look at your charts for similar setups and see how they work.
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