I want to mention something about the trade at ACTS island reversal play.
The reason I took a starter position was volume. I've posted in the past you need the same volume out as the gap down into the bottom island. And that you shouldn't add up 2 or 3 days volume to match the in volume and think it's started. It takes the volume out to match.
Well this shows my point. The 2 day price increase and volume only told me it could enter the gap area and run to gap fill. And that's exactly what it did.
SO; The more you see something happen, the more you can rely on it !
This is how I trade island reversals. From what I've noticed in my years. Several days of small price climb in the bottom channel with large volumes indicates the possibility of a come back. Not the come back will happen. Without that matching volume day moving price into the gap area. It still could have walked back into the channel.
Just so happens this one went too far IMO. And now I expect it to channel and maybe even retrace back down. Instead of climb up to gap fill, like the play should have. But there's the volume out, matching the volume in as needed for my TIP to stand and happen again.
Island reversal TIP: a comeback filling the gap down, needs the same volume out as volume in. Don't add up volume days while in the channel. That's only a possibility signal.
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