Several days ago with Solana trading above $41 I called for a decline in a corrective fashion.
a= $35.30
b= $38.05
c of B bottom at = $31.31
Today we struck a low of $35.4975. It's certainly possible we get one more incremental low. It's also possible we go straight down to new lows. However, my preference is we rally to $38.05 and then decline to $31.31 for a summer bottom. Time will tell if my preferred pattern plays out.
What am I basing this analysis on?
Time.
Whereas, it would not shock me if me we went straight down to new lows, or even straight to $31.31. I have long opined on the fact the final decline into $25.78 was overlapping resembling an ending diagonal. That pattern took 7 weeks to conclude and wave IV to conclude in a far shorter time (1/3 of the time) seems a bit out of place.
Therefore I'll stick to my analysis till invalidated. Ironically invalidation becomes a reality at new lows...so we wait for clues. As of today, we are progressing as projected so no need to alter the strategy.
What's the strategy?
Now that we have declined into the $35 area, we should expect a short term rally to $38-$39 and then a decline into $31.31. Provided that happens, I plan to put on a long trade in that area with a stop in place at $27. I'll give it some room. I'm risking $4 points of downside for the potential of $20 plus to the upside over the remaining months of summer. That's 1:5 risk/reward and I like those ratios.
But we're early on as no rally to $38-$39 has taken place. If we rally and DO NOT DECLINE TO $31.31 I WILL NOT CHASE SOLANA. The analysis done days prior must play out as advertised or I will not dedicate any hard earned money to this trade idea.
PS: If you rely on my postings daily please give this a thumbs up.
Best to all,
Chris
a= $35.30
b= $38.05
c of B bottom at = $31.31
Today we struck a low of $35.4975. It's certainly possible we get one more incremental low. It's also possible we go straight down to new lows. However, my preference is we rally to $38.05 and then decline to $31.31 for a summer bottom. Time will tell if my preferred pattern plays out.
What am I basing this analysis on?
Time.
Whereas, it would not shock me if me we went straight down to new lows, or even straight to $31.31. I have long opined on the fact the final decline into $25.78 was overlapping resembling an ending diagonal. That pattern took 7 weeks to conclude and wave IV to conclude in a far shorter time (1/3 of the time) seems a bit out of place.
Therefore I'll stick to my analysis till invalidated. Ironically invalidation becomes a reality at new lows...so we wait for clues. As of today, we are progressing as projected so no need to alter the strategy.
What's the strategy?
Now that we have declined into the $35 area, we should expect a short term rally to $38-$39 and then a decline into $31.31. Provided that happens, I plan to put on a long trade in that area with a stop in place at $27. I'll give it some room. I'm risking $4 points of downside for the potential of $20 plus to the upside over the remaining months of summer. That's 1:5 risk/reward and I like those ratios.
But we're early on as no rally to $38-$39 has taken place. If we rally and DO NOT DECLINE TO $31.31 I WILL NOT CHASE SOLANA. The analysis done days prior must play out as advertised or I will not dedicate any hard earned money to this trade idea.
PS: If you rely on my postings daily please give this a thumbs up.
Best to all,
Chris
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.