It is an obvious successful BO of a bear channel (last yellow channel lines). Labeled 1st BO. Then a second BO of last 51 bars. I think it will BO of the yellow resistance line and if it does Odds favor long for at least another leg up. I would bet long. 60% chance for another leg up. 40% chance it goes into range trading with top of the range being the yellow resistance line. But at this point I see nothing that really indicates weakness as concerns the previous to BO ( 1&2) so my bet would be long and add more on a weak P.B. (Average down that is) LOL. SINCE IT IS HITTING YELLOW RESISTANCE LINE if the 3 rd BO were to fail it would likely come back to test that line again BEFORE going into a range so it makes sense for me to average down on any PB from the last day one the chart. Then should range trading happen I can exit the average down long position with a profit on a subsequent test of the yellow resistance line.
Game Stop GME
- Thread starter Violintrader
- Start date
Remember the market cycle. bo tight channel down left side of chart…then sideways action (aka range behavior), followed by BO then more range behavior (purple box) followed by BO failure of box. Then reversal back to top of box followed by another BO (2nd) that appears to be a successful one. So the odds are another leg up.
market cycle: BO to sideways to BO to sideways. The BO’s usually have two components: spike and channel. So the cycle goes like this…Bo..channel…range followed by another BO….range…channel….ad nauseam. Channel starts after first PB in a spike. The BO north of the last yellow channel and the 2nd BO neither have yet seen a PB. Only an implied PB on that last BO. Implied PB on that second bar left from the last bar is called implied because on a smaller TF it is an “actual” PB (i.e. a lower low). To me the two BO indicate strength so I would bet long but also exit should a range develop (hopefully with a profit on any averaged down position).
market cycle: BO to sideways to BO to sideways. The BO’s usually have two components: spike and channel. So the cycle goes like this…Bo..channel…range followed by another BO….range…channel….ad nauseam. Channel starts after first PB in a spike. The BO north of the last yellow channel and the 2nd BO neither have yet seen a PB. Only an implied PB on that last BO. Implied PB on that second bar left from the last bar is called implied because on a smaller TF it is an “actual” PB (i.e. a lower low). To me the two BO indicate strength so I would bet long but also exit should a range develop (hopefully with a profit on any averaged down position).
You just described the Darvas Box. Even Darvas never went into this much detail. Of course his books were really for the layperson.
On the other hand, Darvas would never buy any stock that wasn't trading at an all time high.
I don't think Darvas would average down either.
You should close some long positions, and take some profit
as the reward : risk ratio is now very healthy.
for remaining long positions, hold it a little longer
as the price might go even higher.
make sure you have STOP in place.
watch out for price exhaustion and get ready to flatten all long positions.
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i did and traded amc today 3/28/22 and got paid. it seems the same market participants are trading gme and amc today. that's what the chart seems like to me.
i was taught by my mentor about market participants. my theory is that the same market participants are playing both amc and gme right now. that's my educated guess.