1:7 Risk To reward Sell setup For ADBE
This analysis delves into a potential trade setup on the D1 (Daily) timeframe, using Smart Money Concepts. Below is a detailed breakdown:
😇 7 Dimension Analysis
Time Frame: D1 (Daily)
Swing Structure:
The current swing structure is bullish but shows signs of exhaustion. After a swing liquidity sweep and meeting key parameters like inducement, the impulsive swing move was unable to sustain itself above the previous higher high (hH) level.
All Points of Interest (POIs) have been mitigated, and after sweeping the liquidity, the price is likely to close in the Premier zone of the swing, signaling a strong possibility of a sharp sell-off in the coming move.
A "Whale Scoop" entry model is preferred here, with resistance and supply zones also located at these levels. The fake breakout further supports the expectation of a deep correction.
Pattern:
🟢 Chart Patterns:
Reversal pattern: A double top has formed right at the top, alongside a shakeout, indicating a potential reversal.
🟢 Candle Patterns:
The record session ended with a long wick hammer right at the swing level, signaling the probable start of another corrective swing move.
Volume:
🟢 There was no significant volume during the entire impulsive move, which suggests that the move may have been a trap. This, combined with the fake-out trap, confirms the likelihood of an impending sell-off.
Momentum RSI:
🟢 Although the momentum is still in the bullish zone with no range shift yet, a powerful divergence indicates that a substantial amount of bullish momentum is about to be exhausted. Caution is advised before considering any buy positions.
Volatility Bollinger Bands:
🟢 The expansion phase of the Bollinger Bands is likely coming to an end, suggesting that the price might enter a sideways or corrective phase for some time.
Strength ADX:
The ADX still reflects a bullish trend, but given the other indicators, this may be lagging behind the actual price action.
Rating: ⭐⭐⭐ (3 Stars)
Probability: 60%
The trade setup has a moderate probability, indicating a cautious approach with potential for significant reward if the expected correction occurs.
✔️ Entry Time Frame: Daily
✅ Entry TF Structure: Bearish Liquidity Sweep
☑️ POI: Fakeout at swing level
💡 Decision: Initiate a Sell position.
🚀 Entry: 578
✋ Stop Loss: 589
🎯 Take Profit: 483
😊 Risk to Reward Ratio: 1:7
🕛 Expected Duration: 20 days
SUMMARY:
This Daily analysis suggests a counter-trend sell opportunity in a bullish structure showing signs of weakening. The presence of a double top, fake breakout, and lack of volume during the impulsive move all point toward an impending bearish correction. The setup is given a 60% probability rating, reflecting a cautious yet potentially lucrative opportunity. The recommended trade involves selling at 578 with a stop loss at 589 and a take profit at 483, yielding a risk-to-reward ratio of 1:7. The expected duration for this trade is 20 days, and it should be monitored closely for signs of the anticipated sell-off.
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