The price action of ALGO has formed a big pattern and within this , the priceline also has formed a smaller pattern as well. The price action of the leading ALGO was accumulated at the support of the smaller pattern and at the same time it was trying to break out the resistance of the bigger pattern as well. Finally, the priceline broke out the resistance of the bigger and now re-testing the support of the pattern. But the is not supporting this break out as it is quite low at the moment. If there will be a buying while re-testing the previous resistance as support then the breakout can be confirmed and the price action ca turn very strong otherwise it can move down in the same pattern and even break down the support of the as well.
Now this time on the weekly time frame chart, the price action has formed the final leg of the pattern. There is also 50 support in the buying zone. This is very big than the previous one, therefore, this time the move can be bigger.
The Fibonacci targets of this pattern can be:
Buy between: $0.8718 to $0.6086
Sell between: $1.07 to $1.57
The maximum extent of potential reversal zone $0.6086 can be used as stop loss. Or to minimize the risk we can use the 50 as stop loss. As per the above targets, this trade has a big profit possibility of 157%, and the high loss possibility is 31% and incase we use the weekly 50 as stop loss then the loss possibility is up to 25%, but as the 50 will be moved up the loss ratio will be decreased.
If the priceline will break down the support of the rising pattern then it can move more down to test the support of the pattern on the daily time frame. However, on the weekly time frame, we have a very strong reversal formed. Therefore, on the long-term there are strong chances that the price action will start it bigger rally than the previous one.
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