Earlier this year SEA had an almost perfect set up and one which I am actively looking for.
It was a little complex, as it was responding to the price of crude oil, so both charts had to be watched at the same time.
Firstly there was a quite narrow spread downbar on high volume, with the next bar up, which suggested the downbar was very likely to contain serious buying. It was this bar that peaked my interest. In hindsight this was probably just preliminary support.
Then two weeks later there were two more bars which had high volume events, which also looked like buying.
Then the next bar was down on low volume. This suggested the sellers were potentially exhausted.
And at the same time, the crude chart was looking like it was beginning to bottom out.
Narrow spread weekly bars on high volume that infer buying or support, are amongst the most powerful setups to trade.
Sadly they are quite rare, and can also be difficult to find.
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and at the same time the daily chart was unfolding, and it is where entries and exits are to be found (follow on a weekly, trade from the daily).
So here is the daily chart, with vertical lines showing the weeks
There are no perfect rules for entries, they all contain some sort of risk, however there are some points that almost cry out for an entry.....anyone want to have a go.....
