USB/PR trade ideas
H&S in USBNYSE:USB
WHY
1. USB traced well pronounced head and shoulders pattern on D and W.
2. Other industry (finance) stocks such as GS, WFS also posted a reversal on W and M.
3. SPX500 seems to be looking south on W
TRADE DURATION and PROFIT TARGET
USB and market in general might be starting long bearish trend however here we target the distance to
- approximately equal to the height of the H&S structure
- 200MA on W basis (highest timeframe where pattern is visible)
- support determined by previous highs
HOW
1. Short stocks with risk reward 4.0
2. Avoid options as it can be a long story
ENTRY
Trade will be entered 4H (lower timeframe) with SL
Waiting for at least 0.5 Fibo retracement for better RtW ratio
Swing on USBThis looks like an easy play. That candlestick on a support is a possible indicator of a reversal. The buy in would be its confirmation that it's in an uptrend.
USB Long Entry SwingIdeally should be done right before trading day close but here we go.
USB is in general uptrend, so long position is sought. Initial long at 54.60 pullback stopped out at 53.50.
Second entry with half position size at 52.75 pullback level, with subsequent long at 50 if pullback reaches here. Entry at 52.75 and 50 with stop at 49 was the initial plan. Expected turnaround between 50 and 52.75.
However, with moving average support/bounce, bullish divergence and higher low formation, there is a good chance that USB has finally found its bottom (~51 level). Turnaround confirmation here.
Currently long at 52.75, but adding remaining half of position here at 51.65 with stop at 49.50.
Also add another position at breakout of 54.80 with strong stoploss to follow after. Use stoploss to follow profits if profits develop.
However, short at breakdown of 49 level
USBReverse head and shoulders, looking for a break and daily close above the down ward trend line.
Target will be 45..40
USB at resistance pre-earningsUSB hit a Weekly + Daily resistance today at 40.85 where I took September 40 Puts. Implied Volatility was cheap so I went with Singles. Also later this morning there was unusual Put volume that came across the scanner but I had already taken the trade near the open.
Market Sentiment
I find myself net short Financials going into this earnings season. That is entirely due to the fact that these stocks are hitting technical resistance levels that fit my trading plan. Fundamentally the pundits are talking about how this may be a bad quarter due to lack of interest rate hikes. The fact that everyone is thinking one way (down) makes me want to start looking for hedges in this sector.
RSI highs align to perfectly to create resistance for USBEvery single RSI high pivot matches up. It's remarkable. Just wait for the RSI to move a little bit higher until it hits resistance, and then short.
$39 is a crucial level and so far protectedIf u trade less and observe more your chances of making money is very high. Just train your eye to see what is going on rather than focusing on trading too many trades which even if you are right most of the time you will end making very little gain but help your broker make the most out of your trades. If you want a real-time alerts try www.2waytrading.com
Short $USB target $37.50 Short $USB target $37.50 Closing Price above/below 50 Day Moving Average Bearish
Closing Price above/below 200 Day Moving Average Bearish
50 Day Moving Average above/below 200 Day Moving Average Bearish
