Stop Loss : 7,730
Where we are
We are either forming an correction or 5 wave impulse. Whilst my conviction is that it will be a 5 wave impulse, I want to create the flexibility to profit from either.
Likely resistance and reversal levels are shown on the chart in blue:
9,600 - 0.5 Fib of Bear Wave 5 (BrW5) & top of the Last Leg of Bear Wave Five and bottom Bear Wave 3
10,300 - 0.618 BrW5 and 1.44ext on leg A/i
11,500 - 0.78 BrW5, diagonal down trend, projection
My current plan assumes a relatively simple and straight forward movement up to some of these levels. This is unlikely to happen and I will adapt my plan as we move through the coming period. For now, it is as follows:
1. Let this run through past 9,600.
2. Take 25% profits at 10,300 and move my stop loss to the bottom of the two green diagonal lines (e.g. 8500). Taking this level of profits and moving the SL to that point will mean that I can allow the rest of the 75% to run 'risk free'.
3. Monitor what happens around 11,500. *IF* we get this far, I find it difficult to believe we will not at least see some short term retrace here so I will likely sell and look to enter a new trade on a retrace.