Trading New 78 Day High
after 200EMA Breakout, 20 days Price above 200EMA and 20 days RSI 14 above 60.
In the quest of finding that quick move as well as taking profit in a short span of time while banking on the momentum of a stock I was able to find this pattern that when observed carefully could potentially give you a handsome profit.
This is a Test on June 26, 2020 of BLNK which showed as one of the New 78 Day High on Stockfetcher. Please refer to my stockfetcher script on New 78 Day High on my previous blog "New 78 Day High Offset"
This is the chart of BLNK when it made it's New 78 Day High. Try to observe the points that had been numbered according to the Analysis. Better still if you open the image in a separate window so you can follow through the Analysis well.
ANALYSIS:
- Price B/O on 200EMA
- Price Retested on 200EMA
NOTE: The Retest have RSI above 60 - 30EMA B/O on 200EMA
- B/O and Retest on 2.50 Previous Failure Feb 10, 2020
NOTE: Feb. 10, 2020 RSI below 60 on 2.50 Failure
Jun. 24, 2020 RSI above 60 on Retest of 2.50 - B/O and Retest on 2.75 Previous Failure Feb. 26, 2020
NOTE: Feb 26, 2020 RSI below 60 on 2.75 Failure
Jun 26, 2020 RSI above 60 on Retest of 2.75 - Price Above 200EMA for 20 days. Observe well the price action within this span of time.
- RSI 14 above 60 for 20 days. Observe well the RSI wave within this span of time. This is highlighted with red rectangular box shaded with yellow.
TARGET CALCULATION
TP = Target Price
PH = Previous High
VL = Volatility Low
BC = Breakout Close
TP = ((PH-VL)*3) + BC)
TP = ((2.75 - 1.25) * 3) + 3)
TP = 7.5
ENTRY
Find Previous High and use that as entry
In this case, previous high is at the tip of the Rickshaw candle on Feb 20, 2020
Entry = 3.35
TRADE CALCULATION:
MONEY = 2,000
SHARES = 597
BUY @ = 3.35
BUY AMOUNT = 3.35 * 597 = 1,999.95
TP = 7.5
TARGET AMOUNT = 597 * 7.5 = 4,477.5
PROFIT = 4,477.74 - 1,999.95 = 2,477.55
STOP LOSS = 2.75
LOSS AMOUNT = 2.75 * 597 = 1,641.75
TARGET LOSS = 1,999.95 - 1,641.75 = 358.20
With all the Analysis and Calculation we tried setting up the Trade using the Prediction and Measurement Tool of Tradingview and assume a trade based on our calculations. The following chart gives you the result. A target of $7.5 had been reached. A gain of $4.15 from the entry of $3.35. A $2,477.55 profit in just 7 days of trade on 597 shares on an investment closed to $2,000.
