Fully formed head and shoulders patterns on the daily chart. The neckline was just recently broken as the 50 MA dropped below the 100 MA and is headed towards the 200 right now. We can also see bearish divergence forming on a downwards MACD cross. Stochastic RSI cross downwards as well. The price itself breached the 200 MA level of $175 as well. Looking super bearish here, and this is a stock that is less likely to be impacted by a "lavish" trade deal.
Сделка закрыта: достигнута тейк-профит цена
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Taking profit here. Nice steady decline right near to my target level. I'm out!
Yes. H+S Pattern is there.
However, as your indicators show, stochastic is deeply oversold.
Not the best time to look for a breakdown in price.
Wait to stochastic rallies to enter short.
CME is the bull market stock.
If it were to breakdown here, it would certainly pull the market in that direction as well.
Thank you for your post. Very illuminating.
Captainsmugglebutt
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@The_Unwind, I was willing to ignore the stochastic here as we saw a clear break below both the neckline of the H&S pattern, and a break below the 200 MA on the daily. 160 seems to be a key support level for the stock, seeing it breakdown through this pattern made me confident that it would move to find its next support before it makes a move afterwards. Though I doubt 160 support will break.
It's played out pretty well even with the steep decline on the stochastic indicator, as you can see if you hit play.
Happy trading mate.
MrDiamondHands
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@The_Unwind, Stoch RSI was overbought right before he posted this chart and resided in neutral territory upon entering the trade... it was nowhere near oversold (ie. Stoch RSI below 20).
Also, when you have price crossing over all three MA's and reversal patterns forming (H&S, triple top, etc.), its very likely that the price will fire downward without retracing.
Be careful when you enter trades based on swing/oscillator indicators, because they usually fail in a strongly trending market.
S&P 500 started March 1 around 2800 and finished at 2800 again on, March 22 (0%). CME started March 1 at around $182 and finished at $163 on March 22 (-10%). CME undoubtedly under-performed the greater market this month...
I would check your assumptions and application of indicators as almost everything you said is fundamentally wrong.
However, as your indicators show, stochastic is deeply oversold.
Not the best time to look for a breakdown in price.
Wait to stochastic rallies to enter short.
CME is the bull market stock.
If it were to breakdown here, it would certainly pull the market in that direction as well.
Thank you for your post. Very illuminating.