ASAN - Nov 24 Opening Sustainable MomentumTrade Idea
Weak businesses that benefited from the Trump rally unravels.
Use the lack of elevated bull volume as an additional indicator of weakness
We are making a bet that at this stage of the Trump rally, it is harder to sustain buying forces for weak companies and so we will see a price reversion to the mean.
We were looking at basket of other potentials - PYCR, ASAN, PENN and FWRG. But only PYCR and ASAN looked viable after the close of the opening H2 candle. However for some reason our Stop Limit order did not activate for PYCR.
Technical entry for ASAN, is based on the momentum of the H2 opening candle.
RUT and SPX also showed bearish confluence.
Trade Planning
Volume - After Trumps win on the 6 Nov, volume was largely below the volume MA
Position - Price recently made a new high (H2)
Price - We have made new highs and are facing resistance to climb higher
Trigger
We need a momentum candle before we can enter.
Opening Sustainable Momentum 🧑🏻🚀
Strategy
Signals identify market opening H2 candles through momentum and behaviour change that potentially could indicate a shift in the current price overall structure (Price gaps and ADR %).
Risk
We use the signal candle's highs and lows for entry and stop loss. If price hits the stop loss, it is clear that the shift we expected did not come to fruitation.
Current SL is at 0.25Fib
Focus
Focus is never on the signal candle alone, but it's role in the larger structure and the direction it is inclined towards with a minimum Risk & Reward of 2R.
Stock must be in a pull back or consolidation area waiting for a broad market momentum to ignite it forward.
Character
Trend, Positive Skew
