The uptrend channel
- A 100% parallel extension of the uptrend channel indicates the strength of this bullish trend.
Symmetrical projection: An uptrend N pattern
- By projecting a 100% symmetry projection of the initial swing from point A to B, and extending it from point C, the target price would be point D at $303.3.
- Given that the anticipated symmetric pullback to point E did not occur, my expectation is for a further 100% extension from point D. As a result, the target price has been revised upwards to point F at $360.8.
Other key levels
Resistance
- The historical highest high at $349.6 is a very strong resistance level, coinciding with the upper band of the channel's 100% extension. The more resistances encountered, the harder it is to break through.
Support
- The 1.5 extension level at $ 332 is a support level that has been tested. Clear price reactions to key Fibonacci levels can enhance the overall significance and value of the analysis.
- The prior low level, which is at $322.5, can always act as a significant support level. Moreover, it’s a resistance turned support level, making it more important.
Possible scenarios
If the uptrend continues…
- When facing the key resistance at $349.6, the market should exhibit a clear movement, like a gap-up opening or a significant bullish candle, to demonstrate its determination.
If the bullish momentum is depleted…
- The market is likely to pull back the price to below the prior low level, which is at $322.5.
- Compared to the 1.5 extension support level, the level of the prior low holds greater importance. If the 1.5 extension support level is breached, it serves as a mere warning. However, If the level of the prior low is breached, it disrupts the rhythm of a healthy bullish trend and makes price movements difficult to anticipate.
Conclusion
- If the key support at $322.5 is breached, it’s better to step out of the market. Allow the market to stabilize on its own, and wait for a clearer signal before reentering.
- If not, the uptrend will continue, and the target price remains at $360.8.
Hindsight bias part
- While our target price is $360.8, the prior historical high level at $349.6 represents the optimal target price. Considering the formidable resistance at the prior historical high, I prefer to sacrifice a small portion of potential returns in favor of a higher probability of success.
**Not Financial Advice**
The information contained in this article is not intended as, and should not be understood as financial advice. You should take independent financial advice from a professional who is aware of the facts and circumstances of your individual situation.
The price has successfully reached the target price of $360.8, accompanied by extremely high trading volume. However, the price closed below the target level, leaving a relatively long tail.
→ The resistance pressure above is significantly strong.
→ The area above a further 100% extension from point D is recognized as an overbought zone, suggesting…
Furthermore, from a channel analysis perspective, the price is entering an overbought zone, as it has extended by 100% as well.
Traders who wish to continue riding the uptrend may consider holding their positions until a potential trend reversal or breakout occurs. To sustain the uptrend, it is important to watch for the following:
There is no correct answer to which TP solution is better, as traders have different trading styles. But one important suggestion is not to turn your winning position into a losing trade. Always have a plan in place to protect your profits.