Short

ALB falling wedge - short then long?

Updated

Starting from a weekly timeframe a falling wedge nearly 7 months in the making is observed on ALB charts. Notably the wedge formation appears beside rising momentum, drawing the supposition a price bottom could be forming.
Considering trades, the question is whether a breakout is imminent or if the price will break down once more to retest the bottom of the wedge. Drilling down a 4 hour timeframe provides some insight. Has momentum failed to reach overbought, portending a drawdown? It could also be we're waiting for the final push of the current thrust...
Overbought on the 4 hour chart could be nice for a couple reasons

opportunity for short term short position (buy PUTs)
setup to sell PUTs/buy CALLs at the bottom of the wedge, especially if momentum remains in an uptrend on longer duration charts (weekly, monthly)

I recently traded the bottom side of a wedge on UNG, could there be a double trade opportunity on ALB? A drop first, then a big push through the top of the wedge?

Note

Is that a failed breakout on the 4h chart?

Note

Insider sales this morning seem to have precipitated the daily drop

tradingview.com/news/tradingview:b902b487d57bd:0-albemarle-corp-officer-sells-shares/

Note

Using a monthly chart and the Date Range tool helped determine the expiration date (about a month out) for an options trade

The other thing that looks promising on the monthly chart is the long term increase in momentum. Could the monthly momentum trend persist amid a short term drawdown to $112? Our two-legged trade idea may be shaping up well.

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It could still be a bull flag forming, but so far the consolidation along the top of the wedge looks bearish

Golden cross also appearing on the 4hr chart, but the 200 period moving average is downward sloping. ALB definitely appears to be bottoming overall.

Note

ALB has taken a decisive turn lower this morning. However we must note it's currently resting on both the 50 & 200 day period SMAs on the 4hr chart, which could act as support

The daily chart shows ALB's price holding on for dear life at the 50 day SMA. Support here would be impressive, but a break lower could very well get a good look at the bottom of the wedge

Trade closed manually

ALB appears to have bottomed having reached oversold yesterday, with a strong bounce in momentum. While it could still fall to our original target of $112 on the downside may be possible, now is probably a good time to cut short positions and consider accumulating shares in this area. If this truly is a bottom in a falling wedge, the upside should be fantastic from here.

Note

Here's an updated chart illustrating the potential bottom

quickshiftinn

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by quickshiftinn

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