TL;DR – $BB's candle on Friday was ugly and the volume was not supportive of the trend. In order to see more upside – we have to clear this resistance at 11.86. Above there, it's full speed ahead.
There is key support at 9.84 and 8.71 – if you are one of the people long right now hoping for a squeeze – it may be in your best interest to stop out below one of those (daily close).
Fully prepared to be downvoted to shit for not going along with the group think – but for those who are more focused on making money than catering to their bias – I figured I would give a little $BB roadmap.
This one is not nearly as simple as my previous plays. We are already in the middle of the breakout. We've also already hit the primary target I had for said breakout.
From here – we need to look at key supports and resistances to determine whether there is good odds for more upside.
First – let me review the breakout in question:
Here you can see we were stuck in a descending channel from Feb 2nd~ until May 25th. This is the exact same setup as many other meme stocks.
After breaking said channel – along with a lot of the other names of this nature – we broke our first key level @ 9.84 with nice volume – and then followed through further to 11.86 – the far target for this move. Overall – it was a fantastic play and generated some nice profits.
However – Friday's candle was not pretty – long wicks like you see there on the top end on a red candle are generally a bad sign for bulls – although I'm not crazy about candlestick reading. It's just one data point. More importantly – we closed lower than the day before with a huge increase in volume. This is often a sign of a major top (or bottom if the role is reversed).
You can see a similar occurrence on 12/1 – as well as 1/26 – although the volume was much higher. Again – just another data point – but one you want to take note of. Every TA post I see here is pretty much people just cherry picking indicators that fit their bias – and that does no one any good. If there is one thing I know – it's that if you go looking for confirmation bias – you will find it. Be careful.
Now – let's take a look at the bottom line – the data that we can actually put into practice, levels:
Very key support is sitting @ 9.84 – below that, 8.71. If we lose the first one, it's not a great sign for momentum. If we lose the second one, I wouldn't go anywhere near this thing.
Now – for the bull case:
We have very key resistance @ 11.86 – if we got a daily close above there, we would rocket straight to 14.37, maybe even 15.72.
How I would play this:
Enter long on a daily close above 11.86 – target 14.37 take half my position off – set a trailing stop loss on the other half and shoot for 15.72 if volume is supportive.
You always want to let the plays come to you – it's not good to force things.
Not Financial Advice
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