This chart situation is definitely a high probability set-up... I enjoy these kinds of set-ups because whichever direction the trader decides to go with, the charts position will let us know if our decision was wrong relatively fast...
Study this set-up closely and see what I see...
The question to always ask is, "If I go Long, what has to happen for me to decide that I am wrong?" (Reversed for a Short decision)
In this chart example, I see a higher probability of higher prices for many reasons... Observe the channel & how price is at the bottom range... Observe the consolidation that started after the gap up(may) Observe how this consolidation forms a wedge while filling the gap Observe the Bollinger Band Width squeezing and how price traded outside of the bands yesterday
With those observations in mind, respect the current broad market conditions...currently bearish right now...Many set-ups/patterns will fail in a bearish market...So if this set-up fails, what indicates that in this situation?
I would keep it simple here... If price closes below the (Green) Channel = Pattern Fail... Exit Long position...Fortunately, price is right at this potential fail indicator...So it will not take much price movement to reach a "wrong" determination...
A more prudent strategy may be to actually wait for price to breakout of the wedge and make your directional decisions based on that...Since price is reaching the apex of the wedge, this decision will come shortly...You just have to be paying attention...
Note: There are thousands of successful trading strategies as well as indicators that work with chart interpretation... Determine what indicators or technical analysis apply the best for any given chart... Different stocks attract different traders... Different traders use different technical analysis... Figure out which T/A traders are using at this particular time and trade with them... Fibs?~Triangles?~Channels?~Price Levels?~Elliott Waves?~Gannalysis?... Last but not least, try to make a case for both the long side as well as the short side...Trade the side that has the better case...
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