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Falsebreakout

JP Morgan Short off All Time HighWith the stock market making new All Time Highs fresh new opportunities for contrarian trades are going to be somewhat scarce. Thanks to a viewer on my Livestream (every Friday on Tradingview: 4pm EST UTC-5) I was made aware of a short setup I like on NYSE:JPM Context This price action is happening at a test of the past ATH set in November 2021. Last week the Earnings announcement pushed price intraday above the high only to close well below the key Resistance level of the former ATH. This is a false breakout signal or as I like to identify them as: Spikes. The Spike The Spike occurred on Earnings. I have found that false breakouts on earnings have a very high probability of signaling a reversal. The significance value (135% ATR) is within my rules. It took until the following week for price to actually pull back to the proper entry point of the Spike bar's Tenkan Sen value at 172.48. What these factors mean I go over during my Livestream. The Trade How I am expressing this trade is in a combination of short shares and Puts. In choosing my Put strike I look for where I see price going as a target via technical analysis. In this case it would be the 50% Retracement of the bullish trend around 155. For expiration I consider the prior bullish trend that got price up to the high I am reading as a false breakout to enter. I project the time that trend took, add an additional month as a time buffer, and then typically take that expiration. Unfortunately, an option expiring in March as this technique would suggest puts the expiration too close and just before earnings. A note about options and earnings: In the 4 weeks prior to earnings very typically a stock's options will experience a rise in IV (implied volatility). This rise in IV and the Greek Vega can increase the prices of all options often offsetting the value lost to theta time decay. This is a very advantageous condition if a trader is long single options. Therefor, I chose the April expirations to give myself the potential for the IV push. I will likely close the options the day before earnings regardless of where price may be. Options are a coin flip.
NYSE:JPMShort
by norok
1
BITCOIN → Why might the price drop to 34K before halving?BINANCE:BTCUSD has been rising for 124 days without any meaningful correction since September. Within a strongly bullish distribution, the price tested the strongest liquidity zone of 48K and made a false breakout, which is a strong sign for the start of a correction. Technically, BTC is in a stalemate situation, between two channels, more precisely in the range between 43K and 40K. The consolidation may last an indefinite amount of time, as fundamentally bitcoin is quite strong, and all the selling that is taking place is related to ETFs. The next halving is expected on April 7, 2024 . Statistically, the market goes into a significant correction phase before this phenomenon and there is a logic in this - to form more favorable positions before the strong rally that everyone is waiting for. At the moment, technically, the price is restrained by the resistance 43118 and the price has chances to rise, but for that the market will have to overcome this resistance and hold the level. From below we have the support at 40181, which is a risk and panic zone. When the price approaches this area, many buyers and sellers have adrenaline levels, as some are eager to open trades and others are afraid of reaching the stop-loss. Within the current situation, we have two scenarios: 1) Shortsqueeze in the format of a false breakout relative to 0.382 fibo, rise, breakout of 43118, consolidation above the level and subsequent rise to 50K, but at the moment, for the reasons I stated above, this scenario doesn't have much of a chance 2) Breakout of 0.382 fibo, the market gets rid of unnecessary passengers (knock out stoplosses), then - the key fibo area in the medium term - 0.618 fibo. Test of the area may occur in February - March and become a strong support before further growth after halving. Support levels: 40181 Resistance levels: 43118 Fundamentally the flagman is doing quite well, but technically there are reasons why the market should lower the price before the growth Regards R. Linda!
BITSTAMP:BTCUSDShort
by RLinda
54
GBPJPY → False breakdown on the background of distribution OANDA:GBPJPY is in the distribution phase after breaking the ascending triangle structure. Against the background of the November 2023 retest, there are not many chances to break 188.3 from the first time. The pound sterling both technically and fundamentally looks stronger than the Japanese yen. On the senior timeframe we see the formation of a sideways movement, which tells us about the neutrality of forces between buyers and sellers. In this case, it is acceptable to use a range trading strategy (trading from the range boundaries). After breaking through the ascending triangle structure an impulse (distribution) is formed, the price has not yet tested the resistance of 188.3, which plays an important role. There is a high chance that the market will show a false breakout and a small correction. The key point of the correction is a test of the rising support line. If the line is broken, the price may head towards the mentioned target. Resistance levels: 188.3, 188.66 Support levels: 185.9, 184.3 The most likely scenario is a false breakout followed by a correction to one of the above support lines, as the market currently has no potential for a resistance breakout. Regards R. Linda!
Short
by RLinda
11
GBPUSD → Weak fundamental background will weaken the poundFX:GBPUSD is set for further declines as the TVC:DXY will continue its strength on the back of Friday's NFP, which will weaken the pound sterling. On d1 we see consolidation and retests of key liquidity areas. Since the opening of the session the market has been testing local areas and the pound is forming a small correction, most likely from the nearest resistance the decline may continue. On H4, the double top is forming a false break of the channel resistance and we understand the approximate resistance area. The bears are concentrated in the range of 1.2600 - 1.2700. On a weak negative backdrop, the pound may test the zones of interest and liquidity below 1.250 in the medium term. Within the range trading inside the ascending price channel, the emerging correction may lead us to trend support. Resistance levels: 1.257, 1.2600, 1.2615, MA-50 Support levels: 1.250, 1.245, 1.2386 I expect the end of the correction at the nearest resistance with the subsequent price drop to these areas on the background of weak fundamental background. Regards R. Linda!
Short
by RLinda
43
GOLD → NFP ahead. Will the sell-off continue? OANDA:XAUUSD continues to form a local bearish channel after updating the high to 2150 and strong sell-offs to the current area. There is still a huge imbalance in the market and the price could go even lower to settle the situation. NFP could perfectly develop the expected scenario I have been telling you about since the sell-off. Expect the data at 13:30 GMT. The Initial Jobless Claims report was released yesterday with positive data for the dollar. This could be a hint that NFP will hit the planned 180K , maybe more , instead of the last 150K . More bullish data relative to expected data will shake up the market. The dollar may strengthen, which will have a positive impact on gold. Gold made a false breakout of 2038 resistance and bearish channel and continues to trade within the downside range. The target support levels are a potential target. But before the news, volatility will be very sluggish. The market is saving the potential for realization. Support levels: 2027, 2025, 2022, 2007 Resistance levels: 2033, 2035, 2038 News can be unpredictable, try to trade carefully before the news. We are expecting a more positive NFP , a rising dollar and gold falling to the previously mentioned targets, but anything can happen OANDA:XAUUSD COMEX:GC1! COMEX_MINI:MGC1! TVC:DXY Regards R. Linda!
OANDA:XAUUSDShort
by RLinda
45
GOLD → Market in range awaiting newsOANDA:XAUUSD is strengthening due to a slight correction in the TVC:DXY . The price is testing the local trend resistance area before the publication of Initial Jobless Claims at 13:30 GMT. The market is in a range as analysts and investors await the Initial Jobless Claims information to roughly understand the situation for tomorrow (Friday) as we approach the NFPs to be released on December 8 at 13:30 GMT. With the correlation between DXY and XAU, the situation is unstable right now. Going forward, the inverse correlation may change even more as there are targets at lower levels for gold. From a technical point of view, since we have a local bearish channel built on the background of strong sell-offs, I expect a false break of resistance and further decline to the previously mentioned targets. Support levels: 2022, 2010, 2007 Resistance levels: 2032, 2035, 2040 Situation may change due to fundamental factor, Unexpected news may change the situation dramatically, but temporarily. Regards R. Linda!
OANDA:XAUUSDShort
by RLinda
8
GOLD → The sell-off may continue. News ahead OANDA:XAUUSD sold off 6% from its high. The price has lost more than $130. This is the biggest drop since August 2020. At the moment a correction is forming, after which the fall will continue On d1, the dollar is strengthening in anticipation of positive news, while the Fed is silent and treading water. Gold is forming a huge false breakout and a candle with a huge shadow, the potential of this setup is that without the influence of the fundamental component, from a technical point of view, the price can fall to 1900-1800 (do not take this as a target, it is just a nuance) For the gold market, the liquidity and imbalance zones are below: 2022, 2012, 2007, 1900, 1987, 1984. The probability is quite high that the price will test most of these targets, it is dangerous to buy now, the market is still in a sell-off, which I warned you about earlier. Reason: fundamental, dollar strength, lack of volumes, global range, engulfment, moving averages cross, huge imbalance. Support levels: 2030, 2022, 2012 Resistance levels: 2035, 2040 I am waiting for the continuation of the fall after the retest of the resistance area. But! Strong news is published today and the market may be stormy, on the background of panic, the price may test the resistance areas before falling COMEX:GC1! COMEX_MINI:MGC1! TVC:DXY Regards R. Linda!
OANDA:XAUUSDShort
by RLinda
20
💱 EURUSD - It's a stalemate. Falling or rising?A stalemate! News ahead: Prerequisites for the fall ↓: 1) False breakout and price consolidation below the channel resistance can send the price downward 2) A breakout of 0.382 Fibo may trigger a fall. 3) The price may reach the trend support as part of the correction 4) This decline may start on the background of bullish news in the US market. Prerequisites for growth ↑: 1) Price is rising and consolidating above 0.236 Fibo and above channel resistance 2) Weak news for the US market will send the pair up to 1.100.
Long
by AndeWave
3
GBPUSD → False breakdown leads to correction before retest FX:GBPUSD reaches the previously mentioned target of 1.2726, a false breakdown of the liquidity area is formed and apparently a correction will be formed before the retest. The TVC:DXY opens with a small counter-trend correction from the opening, which has a corresponding effect on the Forex market. In all probability, the index will test the previously broken resistance: 102.77, 103.06. The outlook is bearish. The pound sterlnigov will form a small correction after a false breakdown of resistance. The nearest support that can be tested before is in the area of 1.2640 - 1.2620. Today the market expects the publication of the US GDP, in November the index rose to 4.9% against 2.1 in the previous period. Analysts expect that the index may remain unchanged at 4.9. This is the broadest indicator of economic activity and the main indicator of the state of the economy, so this fundamental factor will have a medium and long-term impact on the market. Support levels: 1.2640, 1.2620, 1.2560 Resistance levels: 1.2726 I expect correction after a false breakdown. Retest of the support may form another bullish potential before further growth. Regards R. Linda!
Long
by RLinda
4
GOLD → Correction after a false breakdown. US GDP aheadOANDA:XAUUSD reaches the previously mentioned 2050 area a bit faster than we expected. The rally is followed by a logical correction. But how long will the correction last? On D1 we see a counter-trend correction in TVC:DXY . The correction may last until the publication of GDP related news, which is published today at 15:30 GMT. Analysts are expecting the same level of gdp that was released in November. GDP is the broadest measure of economic activity and a key indicator of the health of the economy. Gold may test one of these liquidity areas before rising further. The potential and increased interest will continue to forimize the bullish trend, but the price cannot go up all the time. It is worth paying attention to the liquidity areas: 2037, 2035, 2033, 2029, as well as 0.382 fibo, 0.5 fibo. False breakdown of one of these areas and subsequent price consolidation above the level may end the correction. Resistance levels: 2038, 2042 Support levels: 2037, 2035, 0.382 fibo, 2033, 0.5 fibo. Expecting a correction. The price may head towards any of the mentioned zones before further growth. It is impossible to determine in advance where the price will stop, it will show only the reaction of the price to one of the levels. Regards R. Linda!
OANDA:XAUUSDLong
by RLinda
23
EURUSD → Correction before the news. What could happen?FX:EURUSD is forming a false breakout. This may be the reason for the formation of correction in the short term. The market is also expecting news today, which is worth paying attention to. We are interested in CDGO (MoM) today and the one that may affect the price in the short to medium term is Initial Jobless Claims. For the latter, analysts are expecting an improvement in the indications from 231K to 225K. If the actual data released at 13:30 GMT is higher than expected, the correction may end and the pair will start to strengthen. If the data will be lower than expected, the correction is likely to be a little bit delayed From the technical analysis point of view, an actual false breakdown could be the reason for the price decline to 1.0875 or to 0.382 or 0.5 fibo. But since we have a fairly strong fundamental basis for the medium term, the currency pair has the following areas as targets: 1.1033, 1.115, 1.127 Support levels: 1.0875, 0.382 fibo, 0.05 fibo Resistance levels: 1.0918 The correction may continue until the publication of news that may determine the short-medium term outlook. I expect growth after the test of local support areas. Regards R. Linda!
Long
by RLinda
13
The Art of False Breakouts + RSI: COMPOUND! 📉🚀Trading is an intricate game of psychology, and understanding false breakouts can be the key to success. Let's delve into COMP, where false breakouts played a pivotal role in recent price action. 📉🚀 Closer look to Fakeout : Deconstructing False Breakouts False breakouts are like crafty illusions, luring traders into making premature decisions. COMP, a cryptocurrency known for its volatility, recently demonstrated how these maneuvers can shake the market. From False Bottom to False Top COMP first tricked traders with a false breakdown from the lower range, inducing panic. But as if by sleight of hand, it quickly shifted gears, delivering a false breakout from the upper range, catching many off guard. Trading Wisdom: The Lesson Here The case of COMP underscores the need for cautious trading, especially in volatile markets. Recognizing false breakouts can help you avoid unnecessary losses. Strategies involving stop-loss orders and thorough research can be your shield against these tricky moves. Conclusion: Mind the Illusions COMP's recent shenanigans emphasize the significance of identifying false breakouts. This knowledge can give traders a substantial advantage and help them navigate the turbulent waters of crypto trading. 📊 Trading Strategies | 🧠 Psychology | 📈 Price Action | 💡 Insights | 🌐 Cryptocurrency ❗See related ideas below❗ Share your thoughts in the comments! 💚📉💚
Education
by Yaroslav_Krasko
💱 NZDUSD - Head and shoulders. Bear potential NZDUSD is forming a false breakout and reversal pattern. There is an opportunity for a decline to 0.59000 TA on high timeframe: 1) False breakout of global range resistance 2) The market considers liquidity in the area of 0.59600 as a target TA on low timeframe: 1) A false breakdown in the "head and shoulders" format is formed 2) Price starts realization of the pattern after breaking its base 3) I am waiting for a fall to 0.5985 and 0.59600. Key support📉: 0.5985 Key resistance📈: 0.60000
Short
by AndeWave
11
💱EURUSD - A correction signal is generatedEURUSD is forming a local false breakout. The base of the pattern "double bottom" is the level of 1.049 and we see a breakout (return) of this line. In the near future a correction may be formed after which the local growth will continue. But we should not forget - the global trend is bearish TA on the high timeframe: False breakout of resistance. If the price returns beyond 1.0536 a strong rebound will be formed The liquidity area interesting for the market appears - 1.06000 TA on the low timeframe: False breakout will form an imulse. A correction back to support may be formed, which will form an entry point Buy entry point could be 1.0490, 1.0499. Key support📉: 1.0490 Key resistance📈: 1.0560, 1.05900
Long
by AndeWave
9
🥇GOLD - The fall may continue, but after a small correction Gold reaches the specified level and forms a false breakout attempt. A rebound may be formed. But there is a chance of a continuation of the fall from the level of 1825. TA on the high timeframe: 1) Broken 0.5 fibo level. A strong fall is formed from the opening 2) The liquidity area that the price can test within the counter-trend correction is in the area of 1840-1850. TA on the low timeframe: 1) We have a strong downtrend 2) The price cannot fall all the time. If there is a false breakout of 1825 and the price forms consolidation above the level, there may be a rebound to local resistance levels. 3) In the medium term, the fall will continue, but after a probable correction. Key support📉: 1825 Key resistance📈: 1833, 1840, 1850
OANDA:XAUUSDShort
by AndeWave
13
GOLD → Correction from the liquidity zone. Trap OANDA:XAUUSD is testing the liquidity area I mentioned yesterday. The mentioned levels are not target levels, but only on the way to the target. Gold does not reach the lower boundary of the zone and the market maker forms a trap On the chart I have marked the liquidity area - quite a wide corridor and with a high probability the price should pass this zone, but at the same time the market maker should collect all the liquidity in this area. The obvious trap - correction to resistance - tells us that the decline will continue in the medium term. A candlestick pattern is forming on d1, which also hints to us about the continuation of further decline. The speed is quite high and there is no area on the way that could make resistance from the buyers and stop the market. The market is bearish, but even at such times the price can show a small counter-trend movement (correction) to rest before further movement in one direction or the other. I am still sticking with my target to 1812, 1807 and 1800. The moving averages are showing a strong trend Support levels: 1812, 1815.3 Resistance levels: 1828, 1834.4 I am still of the opinion that the price will continue its decline. There are no setups on the chart at the moment that would predict an immediate rise OANDA:XAUUSD TVC:GOLD COMEX_MINI:MGC1! COMEX:GC1! OANDA:XAGUSD TVC:DXY Regards R. Linda!
OANDA:XAUUSDShort
by RLinda
26
BTCUSD → False breakdown inside the historical range BINANCE:BTCUSD continues to form a global ascending price channel. After the retest of one of the important support levels, a new bullish potential appears On the chart I have marked the range 31400 - 25400. Earlier we saw a correction to the support area and a false breakout of the level, which gives the market a new potential. The indicated range plays a key role for pricing. The boundaries of the range appeared back in the cryptozyme - from May to July, in times of strong decline, now these boundaries are confirmed. In fact, only the resistance of the specified range 31400 separates us from a strong further growth to 35000-40000. At the moment, the price is testing the 28500 area and forming a correction to 26700, the local correction wave at its end may give a reversal and growth to 31400 for another retest of the key resistance. From the fundamental point of view, a strong push for strengthening will be given by the SEC approval of BTC-ETF, but they are not in a hurry yet. The moving averages have recently formed a bearish signal, but within a consolidation formation, in which case the strength of the signal is not so obvious. The market is waiting for something strong and continues to consolidate. Support levels: 26700, 25400 Resistance levels: 28500, 30200, 31400 At the same time bitcoin feels more confident than the same SP500 ( AMEX:SPY ) , whose correlation has been quite strong lately. At the same time, on the background of strengthening of the TVC:DXY , the value of the asset is also growing COINBASE:BTCUSD BINANCE:BTCUSD COINBASE:ETHUSD BINANCE:ETHUSD TVC:DXY VANTAGE:SP500 TVC:SPX Regards R. Linda!
BITSTAMP:BTCUSDLong
by RLinda
11
GBPJPY → A false breakout leads to a retest of resistance FX:GBPJPY is forming a false breakdown of the support at 181.96. On the background of strengthening of the main currency we see active growth of the pair. A false breakout is formed on the chart with the subsequent price growth towards the key resistance, which is the lower boundary of the ascending price channel. If the price after the next retest can return to the framework of the uptrend, then in the medium term we can see the price growth. But, GBP growth may be a short-term correction on the background of weakening of the strict policy of the central bank. In such a case, a retest of the previously broken trend support will determine the entry point for further selling. Support levels: 181.96, 180.900 Resistance levels: trend support, 183.700. I expect a retest of the resistance, and the future pricing of the currency pair will depend on the market's further reaction to this level and GBP behavior. Regards R. Linda!
by RLinda
16
💱EURGBP - False breakdown. Double top EURGBP made an unsuccessful attempt to break through resistance on the background of weakening pound sterling. A false breakout in the double top format is forming. TA on the high timeframe: 1) False breakout of range resistance may bring the price back to support 2) The liquidity target area is around 0.85600. TA on the low timeframe: 1) A move back inside the range is forming. 2) Price may form a retest of 0.8659 resistance before further decline 3) False breakout in the double top format is quite a strong set-up. In the long term we should expect a fall to 0.86076 and then to 0.85650. Key support📉: 0.8630 Key resistance📈: 0.8660
Short
by AndeWave
14
🥇Gold reaches important support. Waiting for a reboundGold is reaching an important goal for us. We've been waiting for this. A test of the level of 1885.100 is being formed. On the background of distributive fall and strong sell-offs, a rebound may occur. TA on the high timeframe: 1) A huge pool of liquidity is formed below the level of 1885, most likely, a false breakout should occur before the rebound TA on the low timeframe: 1) The false breakout could be quick (a few 5-minute sections) or it could be a long one 2) Either way it should be expected. Price after a strong fall may enter a correction or consolidation phase 3) If a false breakout is formed (not yet started), the price will go under the level and will trade lower for some time, but after the growth and return above 1885, an active growth (buyback) will be formed Key support📉: 1885 Key resistance📈: 1900
OANDA:XAUUSDLong
by AndeWave
23
💱USDCAD - Consolidation before further growth is formed USDCAD does not tend to fall after breaking the support at 1.3497. On the background of high timeframe the price retests the key level 1.33724 and forms a correction. Patterns for further growth appear within the correction TA on the high timeframe: 1) Price returns to 1.3502 2) A pre-breakout consolidation is forming near the level. 3) There is an important liquidity area ahead, above 1.35200, an impulse will be formed if this zone is broken through. TA on the low timeframe: 1) A consolidation within a symmetrical triangle is formed near the level of 1.3497 2) A retest of the pattern resistance and a retest of 1.3497 is formed 3) Chance is higher that the resistance will be broken, in this case a break of 1.3497 will form an impulse to 1.35668. Key support📉: 1.34500 Key resistance📈: 1.3497
Long
by AndeWave
16