Trade Ideas

Above is an example of what I was talking about last night, Channel Busters, although last night we were looking at a linear regression channel, this is my Trend Channel. The first example is the doubly serious upside, downside move that snowballs due to the false breakout. The second example is a smaller example of the same.

On the daily chart above we see the serious move down after the parabolic false breakout. The question is whether the current gap up is also a false breakout?

The 15 min 3C chart suggests it may be a false breakout, this could of course lead to a snowball sell-off effect.

The 5 min chart suggests the same, although we are seeing a positive divergence suggesting a bounce, which could be helpful for better risk management entries.

There's obvious resistance around $39. If you like the trade, you can put it on an alert watchlist and wait for a bounce, or you could phase into the position. With world events happening as fast as they are, technical bounces could be irrelevant.

You know how I feel about the Real Estate market, MAC may prove to be a Chanel Buster.

The first part is complete, the bounce looks to have failed at the lower LN line.

Both bounces that are of concern on this chart show up as negative divergences on the 15 min 3C.

Again, you can wait for the bottom channel to be penetrated and look for a possible “kiss goodbye” or you might consider phasing into the trade. The Trend Channel stop out for the uptrend is at $43.65, that may be another potential area of interest for an entry.

Here's another possible channel buster-FOE

The daily chart shows this breakout as a negative divergence as this looks to have seen a long run of distribution. The parabolic moves or channel busting tends to come at the end of the trend. I would be interested in this trade if it were to move below the top channel.

shows the same negative divergence on the channel breakout.

The 1 min chart shows a leading negative divergence.