In a bearish scenario, sales are expected to be below 78.99. The first take profit level is set at 77.93, followed by a second take profit level at 77.45. If the price breaks out below 76.56, the third take profit level is at 76.56, and the fourth take profit level is at 75.70. To manage risk, it is recommended to place a stop loss above 79.50, with the stop loss amounting to at least 1% of the account capital. A trailing stop can also be used to protect profits.
The bullish scenario suggests making purchases above 78.00, but it is advisable to wait for a pullback to this area before initiating the trade. The first take profit level is at 1679.00, which is an uncovered Point of Control (POC). The second take profit level is at 79.33, and the third take profit level is at 79.66 intraday. To manage risk, it is recommended to set a stop loss below 77.40 or at least 1% of the account capital.
Analysis of the H4 Chart
After reaching a buying zone from three weeks ago at an uncovered POC of 76.57, the price has reacted upwards and corrected towards the last selling zone at Friday’s uncovered POC of 78.99. This has resulted in two active POCs at 77.93 and 77.45, which are considered intraday buying (demand) zones. From a structural perspective, the last significant resistance level is located at 79.33. As long as this level remains intact, the sequence of the market is expected to continue its bearish trend.
There is a local H1 support forming at the level of 78.62, and it is anticipated that the price will extend towards 78.99. Bears are expected to be reactivated at this level, leading to a new decline towards 77.93 and 77.45/50, which have already been identified as demand zones. After a moderate bullish rebound, a bearish continuation and decisive breakout are expected, paving the way for further decline towards the support level of 76.56 and the next uncovered POC at 75.70.
On the other hand, if there is a broad rebound from the buying zones at 77.93 and 77.45, along with a decisive breakout of the selling zone and resistance at 79.33, a bullish continuation will imply a trend reversal. Currently, the RSI (Relative Strength Index) is in negative territory but ascending towards the midpoint. This indicates a possible culmination of the corrective ascent once the supply zone is reached.
Understanding Uncovered POC
The term “uncovered POC” refers to the Point of Control, which is the level or zone where the highest volume concentration occurred. In technical analysis, if there was a previous bearish movement from this level, it is considered a selling zone and forms a resistance zone. Conversely, if there was a previous bullish impulse, it is considered a buying zone, often located at lows, thus forming support zones.
Risk management in trading is crucial, and it should be based on the capital and volume traded. To mitigate risk, it is recommended to set a maximum risk of 1% of the capital. It is also suggested to use risk management indicators such as Easy Order to assist in managing trades effectively. By adhering to proper risk management principles, traders can protect their capital and optimize their overall trading performance.
This technical analysis provides insights into the bearish and bullish scenarios for the market. Traders can utilize the information to make informed decisions about sales and purchases, set appropriate take profit and stop loss levels, and apply risk management strategies to mitigate potential losses. It is essential to continuously analyze the market conditions and adjust trading strategies accordingly to ensure long-term success.
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