On the 15-minute chart, ATOM/USDT has formed a nice Cup-shaped base with constantly rising OBV showing a clear accumulation. It is now possibly forming the Handle part of the pattern. I would expect it to test the green support area before breaking out of the Handle. If it doesn't do that, then this pattern is invalid.
Already happened:
1. Nice cup-shaped base.
2. Clear accumulation shown by rising OBV throughout base formation.
Expectation for valid trade:
3. Handle formation tests the green support zone. That also happens to coincide with the 0.382 fib retracement level which is healthy.
4. Bounce from support on HIGH VOLUME and/or break from Handle pattern on HIGH VOLUME.
Invalidation:
If price breaks below support zone.
Target:
Depth of the cup base suggests a target of ~31.12. I would, however, be conservative and respect the next area of resistance which is the ~30.66 level.
Stop loss:
1. If strong bounce from support zone, stop loss would be 1xATR below the swing low.
2. If breakout of handle, stop loss would be below handle formation.
Already happened:
1. Nice cup-shaped base.
2. Clear accumulation shown by rising OBV throughout base formation.
Expectation for valid trade:
3. Handle formation tests the green support zone. That also happens to coincide with the 0.382 fib retracement level which is healthy.
4. Bounce from support on HIGH VOLUME and/or break from Handle pattern on HIGH VOLUME.
Invalidation:
If price breaks below support zone.
Target:
Depth of the cup base suggests a target of ~31.12. I would, however, be conservative and respect the next area of resistance which is the ~30.66 level.
Stop loss:
1. If strong bounce from support zone, stop loss would be 1xATR below the swing low.
2. If breakout of handle, stop loss would be below handle formation.
Note
The green support holding strong. Waiting for a strong volume green (blue) candle.Note
Got a high volume momentum candle that broke the pattern's high. This is what my entry looks like.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.