Positional Long in JK PAPER - (Detailed method to trade below)

20 thg 12, 2022

JKPAPER

This one is giving a breakout from what looks like an inverse head and shoulder pattern, which hints at continuation of the ongoing major bull trend in the stock.

Breakout has been accompanied with good bursts of volume activity. Also, it has occured on a day where major indices and the broader market is considerably weak.

Pattern targets come at 510, with two different SLs which one can take.
A tighter SL below the low of the breakout candle where also lies the 20 Day moving average gives a R:R of 1:2.4
A deeper SL, below the latest swing low, where also lies the cluster of 50 Day & 100 Day moving averages, as well as the monthly pivot point, also gives a decent R:R of 1:1.7


Ill tell you how I trade this types of breakout where it is a bit extended or the ideal entry point is just out of reach.

I would buy half of my desired quantity right now, and wait for the day end to get confirmation of the breakout to build my desired position. In this way, there is less fomo if it continues to burst upwards, and you can then add further qtys as it consolidates again and makes new highs.
If it falls back, re-tests and then rises again, then this gives you an opportunity to build your other half of the position at a lower rate and bring down the average cost.
If it falls back and fails to bounce again / gives a false breakout, then with you being only half the desired quantity, you'll lose lesser than usual too!

20 thg 12, 2022

Ghi chú

Forgot to add this -

The mothly pivot levels of R2 and R3 indicate levels where some profit booking can be seen on it's eventual journey towards the pattern target if the trend continues.

These levels could be useful for short swing trades as well, i.e quick trades between these ranges or for entries on any pullbacks in the larger bullish trend.

22 thg 12, 2022

Ghi chú

Will have to close this today it seems
False breakout
Will see how it closes