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Islandreversal

ZS - Scaling InZS had a gap up due to earnings back on March 1st. The stock saw a rise in price within a bullish price channel but was creating a bearish divergence with the RSI indicator. Even with the pullback, the price remained in the bullish channel until it broke down in mid-August. Another earnings report in September led to a gap down that created an Island Reversal pattern & carried the stock price below the March gap, which was now acting as resistance. The stock price continued falling as it tested that March gap resistance a few times but as the price fell the RSI has moved higher creating a Bullish Divergence. With the price moving out of an oversold condition I am looking for the price to move up to re-test the September gap resistance. Depending on bullish momentum the stock may be able to continue rising to fill the September gap.
NASDAQ:ZSLong
by Chartimistic
IBM - Intrigued by Big BlueIBM recently gapped down after an earnings release. That gap down blew passed a previously existing gap from September 5th, leaving it open. Despite the earnings hit the stock did not fall below the previously existing support line dating back to June. If the stock starts finding some buyers it may be possible that the stock gaps back up creating an Island Reversal pattern. The $136.25 area will become important. Does it act as resistance, or will the price push right through? Chart is offering a nice reward-risk for bulls.
NYSE:IBMLong
by Chartimistic
1
Walmart Readying Itself for EMA Correction After Island ReversalNYSE:WMT has been beaten around lately after a report found they were mistreating a group of 178 female workers. After a gap down, more selling off, and then a rebound just above the widely used 200-EMA, it is now seemingly gearing up for a a bullish reversal out of an island reversal chart pattern. Green line: island reversal trajectory Orange rectangle: Gap zone with necessary breach for bullish confirmation. I would not enter a bullish position on NYSE:WMT without seeking this confirmation first.
NYSE:WMTLong
by DoozyTrader
Please make your bets. Dax in a put situationMoin from Hamburg as described in detail in the TC24 live trading room, the DAX is in a put situation (grey area) on a daily basis. There are many arguments for rising (e.g. interest rate cut USA) but also for falling prices - both chart technical and fundamental. The next few days will tell us more where the journey is heading. Perhaps the recently opened reporting season for US companies will provide the necessary impulses. Dax prices above 12,400-12,440 significantly increase the chances of further increases, even long term. On the other hand, if the Dax closes below 12,300 points (end of day), the first profit target is the support line at 12,189. Despite the good volatility on an intraday basis, daily traders should wait until the Dax is leaving the grey zone. Good trades!
XETR:DAX
by TradersClub24-International
4
SPY gaps and implication?Well, as I was reading about gaps in "Technical Analysis of Financial Markets" by John J Murphy last night, I was particularly interested in the section describing the island reversal pattern as that happened to be the section I was reading (and I have wanted to learn more about gaps implications for a while). As I also observed the futures market last night and saw that there was a significant potential for the SPY to gap down on the open today, my interest in this pattern was even more peaked. So, this may be a misapplication (particularly the initial breakaway gap on 5/9), but I the implications are probably valid particularly if you isolate the trading pattern as I have labeled as a Y wave (of the larger wave C within this ABCDE correction that constitutes an even larger wave B within the cycle ABC correction...got that). So what we have here would be the following: Breakaway gap formed on 5/9/2018. Next trading day we have a runaway gap formed 5/10. Finally, to conclude the uptrend we observed an exhaustion gap yesterday, 5/14. Today's gap down was a bearish breakaway gap that resulted in the island reversal pattern formation. So, what is the implication of all this? Well, as the name implies, a reversal gap tends to signify a reversal in trend. How big this reversal will be is still up to debate, but my bias as my chart above suggests is that this is just the first move down of a larger downward move that should take SPY to retest the lower trend line. I'm open to several other scenarios playing out besides the primary one show above. Scenario 1 is my current working thesis in which we are on Wave B of a larger ABC correction. This wave B is an ABCDE type correction (a 3-3-3-3-3 correction as seen by the XYZ labeled waves). Under this scenario, we get a move to the lower trend line, one final bounce up off this trend line in the region of $261-262. We move up to test the upper trend line around $275-276. The final fall ensues and SPY falls toward $242 range before the next significant reversal. Scenario 2 could see a 50% retracement of the recent move up, putting a reversal in the SPY right around $266.5. If this were to move on up and break the trend line/channel as drawn, then it would suggest a possible Wave 1 up and lead me to take a long position in the market. Of course a bullish reversal could occur at any point, but given the island reversal pattern, I expect that we have significantly more downward movement to go before we can potentially fill the downward breakaway gap and re-test the island region. Scenario 3 would be a break of the lower trend line/channel and suggest a very bearish move. A break of the lower trend line would lead me to increase my current short position (especially with a break of support at $254) as I would see this as a sign SPY has completed wave B. The wave C move down to around $242 would therefore be underway. I'd love your comments if you have any to offer! Like if this was helpful or entertaining (even if for a laugh).
AMEX:SPYShort
by CryptoTA4U
4