lowtrade

[lowtrade]

You found a great play now or strong watch stock.

CGRA has a channel pattern attempting to break out on the third top touch, of a channel pattern. The third touch is when resistance is usually broken with channels.

Channel plays in general;
The rule of thumb for channels is they can last from 3 to 5 touches then either break up or down. Rare to find a channel last more then 5 top or bottom touches. So if your watching one. Expect break up or down on 3rd top or bottom touch. And be confident it will break on the 4th or 5th for sure. The unknown with channels is which way will retail mindset change too.


For CGRA;
Both entry/exit indicators DMI & 5,10,20 MAs are at confirmed entry. Both support indicators are positive, but volume is not increasing. This causes concern there may not be enough sentiment to continue from break, as expected, by the chart & TA indicators.

The pattern target is .025 and since .0175 resistance has already been broke, one could enter the play. Personally volume would cause me to enter in 2 steps. Small @.018 and larger @ .02 say.

By doing this you acknowledge the sentiment concern, yet position yourself for continuation. If volume doesn't support continuation you loss on a retrace is smaller. But if volume comes, you just add when a little surer continuation to target is fact.

http://stockcharts.com/h-sc/ui?s=CGRA&p=D&yr=0&mn=6&dy=0&id=p58272921651

Completely forget the story!! Basing any stock trade on story expectations of retail actions, will only add confusion to ones trade plan.

The thing to keep in mind while trading on TA & charts is, over the decade's of chart patterns. There has been hundreds of reasons retail acts as it does. So one never actually KNOWS why patterns move as they have. But understanding every thought retail has, has been baked into the result.

You evaluate these thoughts with the TA indicators and volume. Mindset is the chart. Psychology is the indicators and sentiment is the volume. It takes all 3 to get the result you want.