WHR - Risk Vs. Potential Reward
Updated
On a purely technical basis, and relatively short-term at that, WHR has had rather volatile and chaotic price action. None of the classic and more reliable technical structures exist at the moment for WHR, but that does not mean there are no opportunities to play.
Given the current setup, I believe there are 3 potential scenarios:
1. The most bullish, an immediate or rather quick (1-2 week) gap fill to 150, which would be good for about 16% from 7/24/18 close of 128
2. A bounce to the most recent floor through which WHR gapped below near 143, which would be good for about 10% from 7/24/18 close of 128
3. A move lower to test 4 year lows near 123, which would be about 4% lower
Now, there are an infinite number of ways this could play out, but given these 3 potential scenarios based on price action and technical structure, if you remain disciplined and make use of good stop levels, I believe there is a chance to make some money, as the risk/return potential favors a long play. Set a tight stop loss near 123, because if we close below 123 we are in free fall. Play for a pop to 143 or 150.
Personally I do not often trade these types of setups, as it is basically trying to catch a falling knife. That said, with the use of a disciplined trade process or through the use of options, there may be some potential on this trade.
Given the current setup, I believe there are 3 potential scenarios:
1. The most bullish, an immediate or rather quick (1-2 week) gap fill to 150, which would be good for about 16% from 7/24/18 close of 128
2. A bounce to the most recent floor through which WHR gapped below near 143, which would be good for about 10% from 7/24/18 close of 128
3. A move lower to test 4 year lows near 123, which would be about 4% lower
Now, there are an infinite number of ways this could play out, but given these 3 potential scenarios based on price action and technical structure, if you remain disciplined and make use of good stop levels, I believe there is a chance to make some money, as the risk/return potential favors a long play. Set a tight stop loss near 123, because if we close below 123 we are in free fall. Play for a pop to 143 or 150.
Personally I do not often trade these types of setups, as it is basically trying to catch a falling knife. That said, with the use of a disciplined trade process or through the use of options, there may be some potential on this trade.
Note
We've tested 4 year lows (scenario 3), and have a set up for a bear trap. From here, if we have tight stop loss levels in place, there may be an opportunity for a pop higher.Note
Previous chart was cut off, see new chart below
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