I'm seeing 2 scenarios at play here:
1) Within the green broadening channel, it looks possible that TF could break out of the channel on the upside
2) Within the bigger broadening red channel in which the green channel is forming, the pattern seen likely to emerge is that of a partial rise, which often is a warning of a break out of the bigger channel on the downside, followed by a significant plunge
The way I see it is that the odds are stacked against scenario (1).
Main Reason:
The solid blue horizontal line (460) I've drawn is the ceiling of an area of strong resistance - given that prices have congested there in at least 3 trading sessions before, the stalling or even reversing of price at the ceiling is an outcome that is not so unimaginable to me.
It's easier for me to imagine TF punching through the floor of the red channel - but NOT before having moved up to test the blue resistance first - to head for the channel beneath the blue downtrend line.
That said, it's not likely that I'll take a short position before TF falls through support (red horizontal line) at around 412. This is what I need to see TF doing to confirm it's reversed from its previous uptrend (supported by the pastel blue trendline I've drawn).
So, here's my plan:
1) If TF were to break above 460, I'll look to BUY. To avoid being caught in a fake breakout, I'll be looking for volume PLUS a pull back to, or near, 460, which is followed by a further breaking of 2 to 3 points all within a single 5-min candle. First profit target would be around 480, the next area of resistance.
2) if TF were to fall through 412, I'll look to SELL. Again, won't do anything unless I have enough conviction that the breakout is for real. First profit target would be around 380 (the next level of support after 400...although 400 does seem like a stronger support to me...)
While waiting, I'm definitely going to go for scalps if the tape is friendly.
1) Within the green broadening channel, it looks possible that TF could break out of the channel on the upside
2) Within the bigger broadening red channel in which the green channel is forming, the pattern seen likely to emerge is that of a partial rise, which often is a warning of a break out of the bigger channel on the downside, followed by a significant plunge
The way I see it is that the odds are stacked against scenario (1).
Main Reason:
The solid blue horizontal line (460) I've drawn is the ceiling of an area of strong resistance - given that prices have congested there in at least 3 trading sessions before, the stalling or even reversing of price at the ceiling is an outcome that is not so unimaginable to me.
It's easier for me to imagine TF punching through the floor of the red channel - but NOT before having moved up to test the blue resistance first - to head for the channel beneath the blue downtrend line.
That said, it's not likely that I'll take a short position before TF falls through support (red horizontal line) at around 412. This is what I need to see TF doing to confirm it's reversed from its previous uptrend (supported by the pastel blue trendline I've drawn).
So, here's my plan:
1) If TF were to break above 460, I'll look to BUY. To avoid being caught in a fake breakout, I'll be looking for volume PLUS a pull back to, or near, 460, which is followed by a further breaking of 2 to 3 points all within a single 5-min candle. First profit target would be around 480, the next area of resistance.
2) if TF were to fall through 412, I'll look to SELL. Again, won't do anything unless I have enough conviction that the breakout is for real. First profit target would be around 380 (the next level of support after 400...although 400 does seem like a stronger support to me...)
While waiting, I'm definitely going to go for scalps if the tape is friendly.
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