Bottom chart is for reference to show where the fibs are drawn from.
On SXP we can see that it is currently in a falling wedge. It is still in a downtrend on this section, making clearly lower highs and lower lows.
There is very clear support at the point marked in a purple box because:
-It is a horizontal zone of high volume, meaning there are likely to be a lot of buyers waiting there.
-It is a 0.618 on the fib of the last upward impulse move (fractal continuation fib)
-It is a 0.382 on the long term fib of the large upward move (continuation fib)
It is currently bouncing off a low volume zone, which is bullish if there is significant follow-through. I am not sure there will be. So I waiting for price to go a bit lower, on another capitulation, before entering. It is a safe entry in my opinion. If it gets filled, great. If not, look for more trades.
Remember to keep a level head and take profits when trades go your way!
On SXP we can see that it is currently in a falling wedge. It is still in a downtrend on this section, making clearly lower highs and lower lows.
There is very clear support at the point marked in a purple box because:
-It is a horizontal zone of high volume, meaning there are likely to be a lot of buyers waiting there.
-It is a 0.618 on the fib of the last upward impulse move (fractal continuation fib)
-It is a 0.382 on the long term fib of the large upward move (continuation fib)
It is currently bouncing off a low volume zone, which is bullish if there is significant follow-through. I am not sure there will be. So I waiting for price to go a bit lower, on another capitulation, before entering. It is a safe entry in my opinion. If it gets filled, great. If not, look for more trades.
Remember to keep a level head and take profits when trades go your way!