In this chart we see a short term, broadening pattern called the megaphone. I have found that this pattern is usually accurate in predicting breakouts/ price movements. As shown in this hourly chart, ZM has been run along the top trend line , briefly crossed above, and is now headed back to support.
If I were looking for a short term trade I would wait to see if the price is going to break the black line (today’s low and also a price level that saw some price support recently), at the 457 area. If it breaks below, I would take out a short term call with my first target being the second-from-the-bottom black line, the 449 area, and the next is in the 442 area. If i believed I had a high tolerance for unrealized losses, I would set a stop loss far below my buying price (up to 40 percent of buying price for options.) on the other hand, if I had a very small tolerance or unrealized losses, I would set my stop loss at about 5 percent below my buying price, enough to maybe see a profit but not enough to where a short term sell off would force me to sell prematurely.
Feel free to leave comments and questions.
If I were looking for a short term trade I would wait to see if the price is going to break the black line (today’s low and also a price level that saw some price support recently), at the 457 area. If it breaks below, I would take out a short term call with my first target being the second-from-the-bottom black line, the 449 area, and the next is in the 442 area. If i believed I had a high tolerance for unrealized losses, I would set a stop loss far below my buying price (up to 40 percent of buying price for options.) on the other hand, if I had a very small tolerance or unrealized losses, I would set my stop loss at about 5 percent below my buying price, enough to maybe see a profit but not enough to where a short term sell off would force me to sell prematurely.
Feel free to leave comments and questions.
