Why I think this will be profitable: Check the following graph. This was a break through some strong resistance that was tested several times. The next stop up is in the mid to upper thirties.
Point where my assumptions about the trade are wrong: This was not a break through resistance if the S&P goes back down below 824. I will sell around there, and have placed my stop accordingly.
Update: The stop sold out in a bounce down to 822. The market jumped up to about 832 three times, and bounced down each time. It bounced down through support (?). Check out the graph:
lost $34.84 on the trade.
Review: On a second look at the current trends, I had the wrong support level. Check out this graph and let me know if you change your mind, too:
I'm not sure whether I should have seen this coming. Yes, 827 was some serious resistance, but the bottom of the trend was there too. Granted. However, things looked fishy. It tested 834 3 times, and continually had the lower lows and lower highs. Nevertheless, in the future I will take into account volume support lines (827) AND trend support (around 822, right where it bounced today).
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