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Trade Recommendation: Micron Technology

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Technical Overview

  • Micron Technology has experienced a 6.5-fold increase since May 2016. During this 2-year period, the stock found support at its intermediate-term trendline on numerous occasions (green trendline and arrows in Figure 1).
  • From the last retest of the intermediate-term support (last green arrow), the stock moved sharply higher, carried by a steeper support (violet trendline). The same trendline served as a resistance for two weeks in March 2018, when it was retested from below (last two violet arrows).
  • Today (April 23), the stock is breaking below its short-term support (orange trendline), after failing to remain above its 50 SMA on Friday (not shown).

Figure 1. MU Daily Chart

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Implications

  • By the time its correction is over, the stock is expected to have retested the intermediate-term support (green trendline). If the decline is severe and swift, the stock may bounce off the $40 level (i.e. target is the higher of $40 and the green trendline).
  • The stock’s 2018 Resistance (the trendline connecting the March 21 and April 18 highs) is expected to serve as a resistance (red trendline).

Outlook

  • Bearish as long as the stock is trading below its 2018 Resistance.
  • Neutral if the stock moves above the 2018 Resistance.

Trade Recommendation

  • Short at current levels ($48.75 – $49.25)
  • Target: Higher of $40 and green trendline
  • Stop: A close above the red trendline (currently at approximately $53.35, falling by roughly 40 cents/day).

 Benefits of Recommended Trade

  • A favourable risk-reward profile (roughly 1 : 2.25).
  • A sloping-down resistance used as a stop, resulting in an improving risk-reward profile of the trade as time goes by. The steep negative slope of the 2018 Resistance may potentially lead to a situation where the trade is “unsuccessful” (i.e. the stop is hit first before the target), however, still profitable. This is so as the 2018 Resistance will already be below current prices by mid-May (i.e. may get stopped out at a lower price than when the short was initiated).

Disclosure: No position

Featured image courtesy of Shutterstock.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.8 stars on average, based on 12 rated postsPublished author of technical research. In his work on price “gaps”, published in the 2018 International Federation of Technical Analysts’ Annual Journal, he developed a new technical tool for analyzing and trading the “gap” phenomenon – the “K-Divergence” (http://ifta.org/public/files/journal/d_ifta_journal_18). Besides obtaining a Master in Financial Technical Analysis, he has completed a BBA and an MBA from the Schulich School of Business in Toronto and has completed all exams for the CFA, CMT and CFTe designations. Currently, providing research to investment management and financial advisory firms. http://www.linkedin.com/in/konstantindimov




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Trade Recommendation: NZDUSD

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This trade recommendation is setting up quickly and requires prompt attention.

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This is a short term buy trade. The New Zealand Dollar has a very long Hammer candle on the 60 minute chart that has pierced the 6 Day Rolling Pivot Range, the Opening Range and the Daily Pivot Range. This is a bullish setup.

With additional support from the Weekly Pivot Range below the candle we can be confident that this is a high probability trade setup.

So, the action to take is to place a buy order to enter the market long if the price trades above the 0.69440 level. Using the 60 minute chart we will want to buy on a break above this level which will confirm the market wants to move higher. Place your stop just below the Hammer candle low and the profit targets stated below.

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Entry Price: 0.69440
Stop Loss: 0.69170
Profit Targets: First profit target 0.69720. Second profit target is 0.69850.

Disclaimer: Disclaimer: The writer has no positions in the forex markets but does engage in short-term trading of forex and futures.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4 stars on average, based on 56 rated postsI am the founder of VirtuesTrading.com, where traders can learn to use my Virtues Trading System. Formerly a Commodity Trading Advisor, I got my start in the Energy and Precious Metals Options & Futures pits of the New York Mercantile Exchange. I operate on the premise of efficient markets, the management of risk through the analyzation of price action and technical indicators. I have a BA in International Relations from the University of Southern California.




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Trade Recommendation: GBPUSD

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This trade recommendation is setting up quickly and requires prompt attention

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The British Pound is sitting on the Daily Pivot Range as support which coincides with the 14 Day Pivot Moving Average. The uptrend line from the last 48 hours is intact and remains supportive.

The price has been in a channel for the last many hours and could be ready for a move out of the sideways trend.

With good support on a narrow channeling with a triangle formation we have a setup with a close stop loss level, which gives us an ideal risk reward ratio.

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So, the action to take is to place a buy order to enter the market long if the market trades above the 1.34370 level. Using the 60 minute chart we will want to buy on a break above this level which will confirm the market wants to move higher. Place your stop at the swing low and the profit targets stated below.

Entry Price: 1.34370
Stop Loss: 1.34120
Profit Targets: First profit target 1.34820. Second profit target is 1.34960.

Disclaimer: Disclaimer: The writer has no positions in the forex markets but does engage in short-term trading of forex and futures.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4 stars on average, based on 56 rated postsI am the founder of VirtuesTrading.com, where traders can learn to use my Virtues Trading System. Formerly a Commodity Trading Advisor, I got my start in the Energy and Precious Metals Options & Futures pits of the New York Mercantile Exchange. I operate on the premise of efficient markets, the management of risk through the analyzation of price action and technical indicators. I have a BA in International Relations from the University of Southern California.




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Trade Recommendation: USD/RUB

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The US Dollar/Russian Ruble pair (USD/RUB) started its uptrend in January 2014 when it took out resistance of 34. This triggered the cup and handle reversal pattern on the weekly chart. In fact, the breakout attracted so much momentum that it became parabolic on the monthly chart. The pair’s supercharged velocity catapulted it to as high as 85.8435 in January 2016. In two years, the US Dollar grew by over 152% against the Russian Ruble.

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At this price point, the pair was in overbought territory. Those who followed the trend started to take profits. The selling pressure broke the 70 support in March 2016. This activated the rounding bottom reversal pattern on the weekly chart.

USD/RUB went into a downtrend as it posted a series of lower highs and lower lows until it found the bottom at 55.5345 in April 2017. While the pair has been consolidating since, it appears that a reversal is on the horizon.

Technical analysis show that the US Dollar/Russian Ruble pair is positioning to take out resistance of 65. This is a firm resistance level considering that it is the 61.8% Fibonacci level.

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The good news for bulls is that USD/INR is currently creating a bullish higher low setup at support of 61. With this price action, the pair is creating an inverse head and shoulders reversal pattern on the weekly chart. This would be activated once the pair breaks 65.

The strategy is to buy the bullish higher low as close to 61 as possible. As long as bulls preserve this support, they have all the momentum they need to take out 65 and climb to our target of 75.

The process may take more than six months.

Weekly Chart of USD/RUB on Forex.com

As of this writing, the US Dollar/Russian Ruble pair is trading at 61.1176 on Forex.com.

Summary of Strategy

Buy: Buy the higher low as close to 61 as possible.

Target: 75

Stop: 58

 

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 168 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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