VIRTUAL - Short Setup with 30% PotentialWe are currently observing a completed 5-wave structure and the emergence of wave A, which found support around $2.5. Now, price action is forming wave B, which aligns with a resistance area marked by the Fib 0.618 retracement and the daily level.
Trade Setup:
Short Entry: For a riskier entry, you can enter now and ladder your position up to the Fib 0.618 and 0.718 levels. A stop loss should be placed above the 0.786 Fib for protection.
Head and Shoulders Projection: Using the bar pattern and the length of the left shoulder, we estimate that wave C will form over the next 2-3 days, confirming the head and shoulders setup.
Take Profit Target:
Low at $2.3266 – First target for securing profits.
Overall Target: The 0.618 Fib retracement of the entire 5-wave structure at $2.1002.
Risk-Reward (R:R):
Potential for 3:1 and 5:1 trades, offering a gain of 20% - 30%.
Additional Notes:
If dOpen is lost with volume confirmation, this provides an opportunity to add to the short position.
With the holiday season approaching, this short setup allows for some time off the screen while still capitalizing on market movements.
This setup offers an excellent blend of risk and reward, with options for both aggressive and conservative short entries. Happy trading.
