If you’re keeping track, the market is poised to complete its fourth successful Bull Flag Retracement since reversing higher in November 2016. While it’s an impressive feat, it’s our job to make it profitable as price continues the bullish pathway.
Here’s the pattern and potential pathway to more profits as the uptrend continues:
Since November, price touched the rising 200 day SMA and buyers intervened aggressively, reversing the mid-year weakness into late-year impressive strength. From then, three small pullbacks or retracements – tiny Bull Flags – set-up and triggered. We generally buy on a retracement to the rising 20 day EMA in a strong uptrend. The minimum (smallest) target is a retest of the prior high and the goal is often to hold as long as possible, exiting when price breaks under a rising trendline during the rally. We’re seeing price for a fourth time – this time on a deeper retracement from 2,400 – rally “up away from” the rising 20 day EMA near 2,355 “toward” the 2,400 level or higher.
For more daily updates from Corey, visit his blog at Afraid to Trade.com.