Sustainability
of the Breakout
Today’s session was very interesting; it all started with the
initial hourly bull breakout bar above the 2095 resistance at the day session
open that was fully retraced in the next 30minutes. The morning high at the
time was 2097.25 vs. last week’s high of 2098.25. Given that the bulls failed
the follow through with bears fully retracing the breakout by 10:30AM, they had
a chance for a double top reversal. The next 30minutes retraced half the large
bar and it was very likely that it was just another shakefest day. For the next
few hours, it was just a chopfest range between 2094 and 2088. Near the end of
the day session, the bulls retried the HOD and had a clear breakout. All in
all, this set ups tomorrow’s session with the potential to be a large trend day
from the great squeeze and chase feedback as there’s many traders trapped the
past few days from this range.
What’s next?
Daily closed at 2099.25, which is above last week’s high of
2098.25 and it is above the ascending triangle resistance.
The bull train support has been upgraded to 2085 from the
previous 2070 support since the price action is within a breakout phase. The first immediate target of 2100 has been
fulfilled and the next one resides at 2110 still. The intermediate targets are
2123.50 from the ascending triangle and 2128.50 from the cup and handle.
For momentum purposes, ideally the bull train must hold
above 2089-2090 level because that’s the initial hourly breakout low of the
bull sandwich. We will use that to judge the bullishness of this breakout as
there’s no failure allowed here for the bulls. This is the 4th
attempt breaking above the triangle on the hourly chart.
For bears: Must
have another rejection here before the 2110.25 resistance level as that key
level determines the daily bull train fulfilling the intermediate targets or
not. Breaking below 2090 would be a hint of momentum waning and below 2085 we
would consider it as another failed hourly breakout. The support targets below
would be 2078 and 2065 if that happens.
Last but not least, please refer to the weekend/Monday’s
update for the longer term perspective of weekly vs. monthly charts showcasing
that swing bears must reject before 2134 to derail the possible bull train
setup for a new all time high. We approach the market level by level which
means we do not have a new ATH target at this moment until price fulfills the
intermediate targets first. It is very important to know your timeframes and
how they align with each other when planning out trades.
