Ascending Triangle with Bearish Divergence in a Downtrend
MO has been in a downtrend for a while now. Currently, there is an ascending triangle pattern occurring, with Class B bearish divergence on both oscillators. If the trend is your friend, and the technical analysis on the oscillators are respected, then there's an indication of a potential shorting opportunity. The measured move of this pattern for a short almost lines up with the 786 fib retrace, for a potential profit of approximately 43.5%. We would place our stoploss at Dow's 50% retracement.
I am told by other traders and analysts wiser than I that this is not exactly a low risk trade. We are in a market that the Fed is willing to prop up no matter what, and during high stress situations such as a pandemic, people are prone to fall back on habits including smoking cigarettes (even though I would think that a very unwise decision considering this disease). So, this trade could end up falling apart. For that reason, it might be wisest to void entering a position until this trade breaks out to the downside of the ascending triangle.
I am told by other traders and analysts wiser than I that this is not exactly a low risk trade. We are in a market that the Fed is willing to prop up no matter what, and during high stress situations such as a pandemic, people are prone to fall back on habits including smoking cigarettes (even though I would think that a very unwise decision considering this disease). So, this trade could end up falling apart. For that reason, it might be wisest to void entering a position until this trade breaks out to the downside of the ascending triangle.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.