BNX - Finding Support, Resistance and Trade Setups

7 days ago

After yesterday's push to test the $1 level, BNX got hit with some rejections. Following the swing high SFP (Swing Failure Pattern), the price is down about 10%. Let's update our analysis with some key levels that clearly outline our support and resistance zones, and then we'll dive into the trade setups.

Support & Resistance Criteria

Resistance Levels

BNX faced rejection around the $1 mark, with the resistance zone clearly defined between $1.0137 and $1.0263
A short trade could have been initiated from this zone, with a stop loss placed just above $1.03
The Fibonacci retracement highlights key resistance levels at: 0.618 retracement at ~$0.9774, 0.786 retracement at ~$0.9952
The Point of Control (POC) of the current trading range sits around 0.786, and the daily open is at $0.9966
The pitchfork upper resistance trend line further reinforces this area

Moving Averages Adding Resistance:

15-minute 200 SMA: Currently at $0.9836, aligning with the fib retracement 0.618 and adding extra resistance
1-hour 55 SMA: Currently at $0.98085, further supporting the resistance
Note: These SMAs are expected to move down in price over time

Support Levels

Primary Support for Long Trade Opportunity:

The overall short trade target remains at around $0.8, supported by multiple Fibonacci confluences:

-0.6 negative Fibonacci retracement at $0.7912
Trend-based Fibonacci extension 1.272 at $0.7914
The previous key high at $0.7801 and Fibonacci extension 0.133 at $0.7924

These levels give us a strong support window between $0.8 and $0.78.
If the price reaches this level by 17th February, the pitchfork's lower support trendline adds even more strength.

Moving Average for Support:

Daily 200 SMA: Currently at $0.7786, which confirms the support zone
Note: This SMA is expected to move up as time passes, reinforcing support over time

Additional Support Zone:

Another key support region lies between $0.72 and $0.7075, with a key level at $0.7177 supported by a weekly bullish order block, trend-based Fibonacci extension 1.618 at $0.7075, and the anchored VWAP (yellow line) just below.

Trade Setups

Short Trade Setup

Entry Strategy: Look for short entries between $0.981 and $1 as the price tests the resistance area. Confirm entry through order flow and rejection candles
Stop Loss (SL): Place the SL just above the recent high at around $1.018
Target: Aim to reach $0.8, where our confluence of Fibonacci levels and moving averages align
Risk/Reward Ratio: This setup offers an amazing risk/reward ratio of approximately 5:1! Potentially up to 9:1 with effective DCA (dollar-cost averaging) into the short trade

Long Trade Setup

Entry Strategy: If price drops decisively and reaches the support window between $0.8 and $0.78, consider a long trade on confirmation
Stop Loss (SL): Place the SL below $0.77
Target: Aim for a profit target at $0.85
Risk/Reward Ratio: This setup offers an approximate risk/reward ratio of 2.5:1

Keep an eye on the charts, set your alarms to the key support and resistance zones, and wait for a solid signal before jumping in. Be ready to tweak your strategy as the market shifts. Happy trading!

6 days ago

Trade closed manually

SiDec

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SiDec