This idea is based on my original fractal analysis seen here:
Now that I know where price topped out, I can get a better idea as to where the fractal should be.
We have now seen a two red candle correction and a bounce with a green candle from the 50% retracement. If you look at a daily chart starting around April 17, 2014, you will see the same three candles. Unfortunately, this information is not enough to suggest that price will continue respecting the fractal; so we need some confluence.
For starters, we still have the 61.8% retracement, as well as a secondary up-sloping trendline acting as resistance. Also, we reversed just below the 200 MA on 3 occasions (or 4 if you include the one from this week). If we extrapolate the 200 MA for the next 20 bars or so, the fractal appears to remain below it by a consistent amount while also following the same trend.
If we can respect the trend of the fractal and start to consolidate at the 38.2% retracement then you can prepare to go long.
Now that I know where price topped out, I can get a better idea as to where the fractal should be.
We have now seen a two red candle correction and a bounce with a green candle from the 50% retracement. If you look at a daily chart starting around April 17, 2014, you will see the same three candles. Unfortunately, this information is not enough to suggest that price will continue respecting the fractal; so we need some confluence.
For starters, we still have the 61.8% retracement, as well as a secondary up-sloping trendline acting as resistance. Also, we reversed just below the 200 MA on 3 occasions (or 4 if you include the one from this week). If we extrapolate the 200 MA for the next 20 bars or so, the fractal appears to remain below it by a consistent amount while also following the same trend.
If we can respect the trend of the fractal and start to consolidate at the 38.2% retracement then you can prepare to go long.