SoilBuild Reit (SV3U) - Key levels to BUYHey everyone, here's my analysis on SV3U:
Summary:
Price could drop to our S1 zone between 0.315 - 0.320 before going higher, as illustrated by the yellow dotted lines.
Opportunity lies here; once price breaks above the R1 zone, which is a strong resistance area, it is likely to make a pullback to re-test the zone as a support zone before a strong bounce towards the R2 zone. The pullback presents a good opportunity to buy.
Action:
Trade 1. Higher Risk as price might not break above R1 zone
Buy Limit: 0.315 - 0.320
Stop Loss: 0.280
Take Profit: 0.440
Trade 2. Wait for a break above the R1 zone FIRST before this order is valid
Buy Limit: 0.355 - 0.375
Stop Loss: 0.300
Take Profit: 0.440
Analysis:
There are 2 ways to play this trade. In trade 1 highlighted above, we will enter the trade when price makes a pullback to our S1 zone between 0.315 - 0.320. The reason why this is a higher risk trade is because we are assuming that price will be able to break above the R1 zone, which is a key resistance area. On top of that, price is also on a strong downtrend, so it would be better to wait for the break above our key R1 zone as a confirmation for a further rally before we enter a long position. That said, because this is a higher risk trade, we have a higher risk to reward.
In trade 2 highlighted above, we will wait for price to break above R1 and make a pullback to test it as a support zone again where we will enter the trade on the pullback. The reason this has a higher conviction is because current price is facing strong resistance from our R1 zone and there might be a chance that price fail to break above this level and just tumble lower from the current price. In that case, we will not be in the trade as our condition for the break above our R1 zone has not been met. Hence, a break above the R1 zone would allow R1 to act as a key support zone after, which provides us with a solid entry.
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