IMX → Immutable Descending Wedge Bullish Pattern. Time to Long?IMX has been in a descending wedge pullback after a three-legged bull run. This appears to be a textbook long setup, but is it?
How do we trade this? 🤔
The long setup in front of us is reasonable, but there are a few data points in our way. What's in favor of a long position is the descending wedge pattern after a three-legged bull run. The pullback has three pushes down with some strong buy bars, signaling upward pressure.
However, we are still below the Daily 30EMA and a distance from the Support Zone top at $1.49 and the Daily 200EMA at $1.35. You can argue that the third bounce off the descending wedge support is out low and we can place our stop loss there, and that is reasonable. I am suggesting exactly that trade is reasonable after a break of the Daily 30EMA and a re-test of the descending wedge resistance as support. The stop loss can be placed below the previous wedge low of $1.70 with a profit target at a 1:1 Risk/Reward Ratio of $2.414.
💡 Trade Idea 💡
Long Entry: $1.990
🟥 Stop Loss: $1.566
✅ Take Profit: $2.414
⚖️ Risk/Reward Ratio: 1:1
🔑 Key Takeaways 🔑
1. Three pushes up in a bull channel.
2. Descending Wedge bullish pattern with three pushes down.
3. Strong bull signal bars on every wedge push.
4. Suggested to wait for a break of Daily 30EMA and a re-test of wedge resistance as support.
5. RSI at 48.00 and above the Moving Average, supports long bias.
💰 Trading Tip 💰
The longer a trend continues after 3 legs, the probability of that trend continuing lessens. Because of this decreased probability, we ought to reduce our risk when entering trades.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
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