GM short entry at top of price channel
Updated
GM is currently trading at the top of its price channel and is forming a shooting star pattern on its daily chart. Furthermore, it's also forming a sort of "micro" head and shoulders pattern with the two previous channel highs.Looking at the hourly shows decreased volume, declining MACD, and declining RSI from yesterday. Combined this presents a very strong bearish divergence which we can take advantage of.
Strategy:
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- Enter trade SHORT by COB today or on break of the hourly convergence pattern support line, whichever happens first.
- Set price target at $35, but be aware that there will be resistance at the 37.25, 36.60, and 35.53 levels, which all may provide valid exit points. Again, see the hourly charts to clearly see the resistance points at these prices.
- set stop loss at top of shooting star or a similarly sensible position.
Trade active
Active in this trade. Leveraged my play by using PUT options. Entered the trade at COB especially with a strong bearish envelopment forming on the 5 minute chart.Note
Took approximately half my position off the table to lock in profits. Was at +50% at the time.
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