Medium to high risk short - daily double top
Updated
FTM looks to be forming a double top on the daily chart with declining RSI - not a true divergence as it has not yet made a higher high, though a pop above 3.158 would print that. We are currently at an 8 point difference in RSI when were at the same price levels about a week back, which is a very, very strong divergence (again, not true divergence) for the daily chart. We are also at a previous area of major resistance as seen by daily closes in this range (shown by the yellow line). However, no divergences have formed on the 4 hour and RSI is also still in the 60's indicating there's potential for strength left in this run. The daily close for the ATH was around this level, but the ATH itself is 10% higher.
This trade could take several days to play out since daily time frames are typically slower to execute, so decide whether the potential reward is worth locking up your funds - the previous daily divergence for instance took a week to bottom out.
A close above the blue box invalidates this trade.
Target would be the .5 fib retracement at 2.68. If it bounces hard off of that, I would look for a potential long position back up to these levels and potentially beyond to the -0.25 retracement around 3.38.
This trade could take several days to play out since daily time frames are typically slower to execute, so decide whether the potential reward is worth locking up your funds - the previous daily divergence for instance took a week to bottom out.
A close above the blue box invalidates this trade.
Target would be the .5 fib retracement at 2.68. If it bounces hard off of that, I would look for a potential long position back up to these levels and potentially beyond to the -0.25 retracement around 3.38.
Note
If you took profits on that initial drop down to 2.85, I consider this a good spot to re-enter (above 2.95).
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