ETHUSD Perspective And Levels: Bottoming Formation Hourly.
Updated
ETHUSD update: Failed low (double bottom) formation appears on 1 hour time frame which is a trigger for a swing trade long. I am in from 309.95 (50% position size) with a target of 335 and STOP of 294. Reward/risk is about 1.5/1 (this will change as I make adjustments based on new price action). I updated my previous post as soon as I took the position.
The push off the 287.46 low is a typical momentum reversal sign which are tough to buy into initially because it happens fast and there is not a lot of structure to measure risk from. I mentioned in my previous report that I was watching the 290s and low 300s for a possible higher low in order to justify buying back in. 310 isn't the perfect price, but it still offers attractive reward/risk. The higher low that has formed in the 305 area can also serve as a reference point for risk. A reasonable stop would be 303. I chose to put my stop underl the .382 support at 294 to give it a little more room to fluctuate. (Since I am only at 50% position size, I can afford wider stops).
I plan to put on the other 50% upon a break of 316.85 which is just above the recent swing high. While I am eyeing the conservative target of the 335 area, depending on how price action unfolds, I may hold onto part of the position to see how far it can run. A retest of the recent high is not unreasonable while a break can lead up into the 380s.
This is the kind of price action I like to see after a retrace to a significant support (295). Even though price went about 10 points lower, in the context of the bigger picture, it is not that much lower which means the bullish trend that took price into the 350s is still intact. This also means momentum should favor bullish setups, especially when price structure forms on time frames such as a 1 hour or 4 hour. This is when factors are lined up and reward/risk makes sense. Keep in mind, price can fluctuate back toward the 305 area which would be perfectly normal, and I would still consider that supportive.
Also it is not surprise that BTC bounced off of the 5234 level simultaneously which happens to be the .382 of it's entire bullish swing as well. In the bigger picture, the retrace in that market was normal and is not that far from pushing highs again. As long as that market stays supportive, I think that can only help add to the bullish momentum in this market. Certainly something to watch for.
In summary, the healthy retrace to 295 has been a little tricky, but supportive price structure has finally appeared. The higher low at 305, and the .382 support bounce at 295 offer clear reference points to measure risk from. At the same time, it is also reasonable to expect at least a retest of the recent high in the 350s which makes for a reward/risk scenario that is attractive for a swing trade. As long as the 295 support holds, price action should be more on the bullish side. IF 295 breaks again, and the 286 low is compromised, that will negate the bullish structure that is in place. And in that scenario, I will be stopped out and will stand aside to reevaluate.
Comments and questions welcome.
The push off the 287.46 low is a typical momentum reversal sign which are tough to buy into initially because it happens fast and there is not a lot of structure to measure risk from. I mentioned in my previous report that I was watching the 290s and low 300s for a possible higher low in order to justify buying back in. 310 isn't the perfect price, but it still offers attractive reward/risk. The higher low that has formed in the 305 area can also serve as a reference point for risk. A reasonable stop would be 303. I chose to put my stop underl the .382 support at 294 to give it a little more room to fluctuate. (Since I am only at 50% position size, I can afford wider stops).
I plan to put on the other 50% upon a break of 316.85 which is just above the recent swing high. While I am eyeing the conservative target of the 335 area, depending on how price action unfolds, I may hold onto part of the position to see how far it can run. A retest of the recent high is not unreasonable while a break can lead up into the 380s.
This is the kind of price action I like to see after a retrace to a significant support (295). Even though price went about 10 points lower, in the context of the bigger picture, it is not that much lower which means the bullish trend that took price into the 350s is still intact. This also means momentum should favor bullish setups, especially when price structure forms on time frames such as a 1 hour or 4 hour. This is when factors are lined up and reward/risk makes sense. Keep in mind, price can fluctuate back toward the 305 area which would be perfectly normal, and I would still consider that supportive.
Also it is not surprise that BTC bounced off of the 5234 level simultaneously which happens to be the .382 of it's entire bullish swing as well. In the bigger picture, the retrace in that market was normal and is not that far from pushing highs again. As long as that market stays supportive, I think that can only help add to the bullish momentum in this market. Certainly something to watch for.
In summary, the healthy retrace to 295 has been a little tricky, but supportive price structure has finally appeared. The higher low at 305, and the .382 support bounce at 295 offer clear reference points to measure risk from. At the same time, it is also reasonable to expect at least a retest of the recent high in the 350s which makes for a reward/risk scenario that is attractive for a swing trade. As long as the 295 support holds, price action should be more on the bullish side. IF 295 breaks again, and the 286 low is compromised, that will negate the bullish structure that is in place. And in that scenario, I will be stopped out and will stand aside to reevaluate.
Comments and questions welcome.
Note
Stopped out at 294 .Looking to reenter upon a reversal setup in this area. I will write about it in my next report.Note
I am long again at 297.63 (30% position) Stop 283. Target 335. New report will be published within the hour.
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