Cup & Handle potential breakout patternAlthough CAKE experiencing slight local downward pressure at the moment, we have formed a cup and handle breakout pattern with a good volume profile. Currently the Energy in the 90m & 12h are higher than the Green EMA indicating downward pressure, we have seen the Red RSI and Blue LSMA turn back up and cross above 50, as a result of the Blue LSMA turning back up at this level, it is likely that the BBs can continue to expand, we would like to see the Green EMA get higher than the Energy in this TF. The Red RSI in the 12h has also just crossed above 50 and is currently making a bullish cross above the Blue LSMA, it would be good to close like this in 5 hours.
In the daily we have also seen the Red RSI close making contact with the Green EMA as it rises and as a result the Energy is crossing above level 50.
The Green EMA getting above the Energy in the 90 & 12h will in my opinion provide a good indication of reversal to sustained upward pressure and set the conditions for the continuation of this breakout move.
As mentioned in previous publications, these markets can change with very little notice. These changes initially manifest themselves in the lower timeframes and propagate up through the timeframes. Nothing is set in stone. Unless you are day trading, you cannot benefit from these early warning signals.
As always - this is not financial advice but just my view of current market dynamics.
One has to be aware that analyses are done on the basis of what the indicators are saying at the time and things can change. It is important to always monitor the scalping group of timeframes as we will see changes propagate up from there.
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Trade safe
aBL
