NVDA, from the watch list, set up a cup & handle pattern at the base of the ORH. The C&H pattern is fairly straightforward and easy to trade. If you have a nicely formed handle, the trade shouldn't go into the red. From experience I target a 100% fib. extension from the low of the cup to the base of the handle. Although the NVDA trade did extend well beyond 100%, it did retrace sharply after tagging it. That tells me that a lot of traders took their profits when I did.
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5 comments:
It also looks a bit like a breakout from an ascending triangle.
Rick
Rick,
The 15 minute looks like a triangle, but the 5 minute has more of a curve in the handle.
jamie,
hi, i understand how you setup works and everything, but the only thing i don't understand is the fib tgt, how do you draw that thing? from the entry point to the recent low? i don't know how you come up with yours. please explain thank you.
Luis,
I am using Fib. extension tool in Esignal. I start by lining it up with the low of the pattern, in this case the low of the day, then I move to the base which lines up with ORH (high of the first 15 min. candle). Then the tool extends all those lines above the base so that I can arrive at a target and monitor progress as price moves in my direction.
Hope this answers your question.
Fibs are the devils tools! man, that is amazing how it extended right to the 1.382 extension. amazing! nice trade.
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