SnapChat SNAP Surges to Falling Target on Bullish Engulfing Play
Wed, Aug 23, 2:31 PM ET, by Corey Rosenbloom
The last time I posted on SnapChat (SNAP) I clearly highlighted the “Aggressive Bottom Fishing” taking place.
Here’s the successful outcome of that bullish “fade/reversal” play as price crept strongly higher toward our falling EMA target.
Let’s take a look and see what the plan is from here:
Again, take a look at my August 16th “Aggressive Bottom Fishing” post for some perspective.
While a downtrend is clearly in motion, price does tend to “swing” higher and lower in a progression of lower lows and lower highs.
We use the Moving Averages to guide our decisions with structure and possible trade entries (and targets).
In fact, let’s zoom in even closer to see the most recent action with the big positive divergence and even bigger Bullish Engulfing Candle which set the stage for a successful – aggressive – “fade” trade that hit its target today:
Shares traded higher in a “counter-trend retracement” toward both the falling 20 day (green) and now 50 day (blue) Exponential Moving Averages.
We use these as targets as you can see in the yellow highlights in the broader downtrend in the first chart.
At the moment, shares are stalling at the falling 50 day EMA target, granting aggressive traders a chance to exit with a $2.00 or more successful swing trading profit.
The NEXT trade will be the DEPARTURE from the $15.00 per share target.
The assumption is that the downtrend will continue, giving traders a chance to sell-short with a stop above $15.00/$15.50 should the downtrend indeed continue.
The “breakout” play – or short-term reversal outcome – triggers in the event buyers extend this rally beyond the $15.00 per share target and generate a breakout (and short-squeeze from bears who hold short positions).
Play bullishly on a firm breakout above $15.00 or else “downtrend” bearish on another sell-swing developing here.
Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey's book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”
SDI Glossary: "Bullish" Definition
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