OK, that is interesting....... I have never bought and sold like that, so maybe I can learn something about 'blind entries and exits' from you.
and here I was thinking you were probably looking at buying it for a longer term super account or something (in which case I would suggest you have a look at the weekly chart instead)
Do you know what caused the gap down ??
Worth knowing just in case todays price action will only trigger further supply.
And also be aware that the potential buying today may only represent speculative buying, which may be dumped quickly if price does not bounce tomorrow (causing a wider spread downbar as the selling intensifies)
Anyway, firstly I guess you are looking for a long entry ??
Yes, this type of trade (I call them a bounce trade), can be quite profitable no doubt.
And yes there was most likely an element of buying in today's bar, although after looking at the chart a bit, the volume was not really massive or anything.
And if you do have a quick look at the weekly (I like weekly charts), just for comparative purposes, the volume (with two further days to go) is not particulatively impressive either, so it may just be speculative buying, or preliminary support at best.
If volume WAS really large, and price behaved like that, I would be much more confident of a decent rise in response (which in Wyckoff jargon is an Automatic Reaction (AR), and is caused by a temporary supply vacuum, which occurs when everyone who was going to sell at this level does, all at the same time. And price gaps down in response and continues to sell off until some professionals and clever retail traders see some value in stepping up and getting involved. Then with only minimal sellers left at this level, any buying carries price easily higher in response....temporarily, as supply will generally come back to normal fairly quickly).
I have drawn two lines on my charts, one at 41.5cps, and the other at 46cps.
And it is interesting that is roughly the gap from today.
So for tomorrow, the momentum trade would be to buy if the high of today was exceeded @43cps, and the trade would be for price to close (or at least, attempt to close) the new gap.
