ETHUSD: Triangle Points To Strength. Noise Offers Better Entry.

ETHUSD update: As price consolidates, the formation that is unfolding signals further strength. A break above 476 and this market will be facing the 494 to 518 minor resistance zone. Obviously a break out in BTC is key. We are more interested in any retest of lower prices for either a failed breakout or higher low scenario.

Triangles are typically trend continuation patterns. The standard buying of breakouts during these formations is not a bad idea if you are feeling aggressive. At S.C., we have been long term bullish for months but it is not in our plan to be aggressively bullish on the short term.

We anticipate high probability opportunities IF this market, along with BTC, offers any retest of lower prices. This can unfold in the form of a failed range breakout on the bearish side, or a higher low structure around the 423 reversal zone boundary.

We choose this more conservative stance because the 571 resistance level is still intact. This is the .382 resistance of the recent bearish structure relative to the 838 high. It helps us determine if a broader bullish movement is in progress or not.

Since it is not, yet, the short term is more likely to be in a larger range bound environment. Like I have written numerous times, bottoms are a process and that process offers plenty of entry opportunities if you know what they look like.

In summary, there is nothing wrong with taking a bullish break out if the next leg higher unfolds. We will not call it as a trade because it is better managed as a day trade in light of the risk and speed of change in this market.

We navigate these markets according to the criteria set forth by our plan and so should you with yours. We also have to consider risk in light of the fact that our choices can also affect the actions of our followers which is why we lean more to the conservative side.

As the short term price action transitions back to bullish, there will be a lot of noise. The most attractive opportunities will be the lows of this noisy range as long as a decisive new low is not established. Plan ahead for the possibilities and be prepared for those scenarios if they appear. If any swing trade opportunities present themselves, they will be shared with our followers.

تعليق:

ETHUSD update: This market has actually printed a sell trigger which I will be writing about in my next report. This can lead to the broader higher low formation which is where the swing trade long opportunity is likely to appear. The recent consolidation breakouts are more appropriate for day trades since they are closer to a resistance and pose greater risk on the short term.