Double Bottom, Bounce off moving averages, Positive divergence --> $640 profits
5 min Emini Nasdaq 100
Hi,
Market was generally sluggish for the morning session, It opened with a gap of around 6 points, closed the gap and moved in a ranging fashion... I could not tell which direction it was going...But at around 14:30, I began to see prices bounce off moving the moving averages and a double bottom starting to form... It should be clear to you that the moving averages are providing strong support...
This coupled with positive divergence patterns formed by both stochastics and Short-term MACD gave me the signal to go long... This is a high return/risk ratio trade... I simply put my stop loss beneath the moving averages at 1880... My upside is at least to the opening price of 1898...
I longed 1 contract at 1887 and another 2 more contracts at 1895 when prices broke the neckline... price went up as expected, it broke the high established during the morning and continued to go up a little further... I prepared to exit my position and got out at 1908 with $640 profits.