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Buy Setup and Doji bar after 100% Retracement
Buy Setup and Doji bar after 100% Retracement. Although the daily chart of HOV is neutral, there are a few things making for a good reward-risk trade. After the stock collapsed in late June, it made a 100% retracement of the break down, which is bullish. Two days before it was a Buy Setup, with yesterday being a neutral doji bar. However, if this area holds, it will be a higher pivot low from the June low. Additionally, the sector showed relative strength today, and the hourly chart of HOV is a Buy Setup on the 20MA with above average volume. New high is not seeked; however, there is not much resistance until the $62 area on the hourly chart.
chart courtesy of Mastertrader.com
Buy Setups following a 100% retracement of a prior break down suggest a tradable bounce.
Buy over the high made in the first 30-min of trading, with a stop under the lower of the 30-min low or previous day's low.
$1.00 to $2.25 move to the $62 area.
HOV did not meet the entry criteria.
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