PIERCING CANDLE Preparing to buy into ultra short-term oversold conditions
What does this strategy entail?
The instrument is in a downward trend over several days, becoming extended versus its moving averages. As the entry for this setup approaches, the candle's structure may reflect excessive selling with large red candles and expanding daily ranges. In the following session, the price may "gap down" and reclaim the prior day's lows to close to positive territory, reflecting short-term buying interest and potential for a 2-4 day rebound. The strategy is ideal for ultra short-term/active traders looking to capitalize on retracements in a bullish short-term trend.
The tickers highlighted assume no existing position held by the trader. while the setup is confirmed on the preferred candle structure developing during the upcoming session(s).
DARK CLOUD COVER
Preparing to sell into ultra short-term overbought conditions
What does this strategy entail?
The price has been in an upward trend over the short term where, as per the Relative Strength Index trades in an overbought range (above 75 on the RSI in an upward trend or above 55 in a bearish retracement). The price then trades above the prior session highs however fails to hold this level, signalling sellers looking to take control of the price action. The price then closes the session below the prior day's high, suggesting potential for a bearish reversal in the following session.
The tickers highlighted assume no existing position held by the trader while the setup is confirmed on the preferred candle structure developing during the upcoming session(s).
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