PYPL Momentum Stalls REVERSAL / SHORT idea PYPL has had a great past two weeks putting in 7-9% gain. In the past week however, that
momentum has stalled. PYPL has printed a head and shoulders pattern. The predictive algo
of Lux algo suggests a reversal here. PYPL has been resisted on the higher price action
by the second upper anchored VWAP band. The H & S pattern neckline is about 63.
The predictive algorithm of LuxAlgo shows a forecast of downward price action as shown on
the black line to the right of the last candle.
I will close my long position here. Once price falls under 63, I will instead take a short
position targeting 61.35 and 59.35 being the area immediately above the mean VWAP
and first lower VWAP lines respectively. I will also look for the green RSI line to fall under
50 as an entry signal. In keeping with good risk management, the initial stop loss will be
63.15 with an adjustment of 0.12 for every 0.15 of price fall until the first target. I will take
off one third of the position and adjust the stop loss by a trialing ATR after that.
