A Dark Cloud Cover candlestick pattern formed up around the immediate resistance area of 7.9 (bearish reversal pattern). Factors indicating the importance of this signal are:
- The greater the penetration of the first candle by the second candle (yes).
- Both candles are marabozus (yes).
- The second body opens above a major resistance level (yes, above the immediate resistance at 7.9).
- High volume on the second day (no, possible pullback only).
Pullback or retest of major support may potentially follow.
*LitWick pattern reliability: HIGH
Trading Plan
- Buy/accumulate the retest of major support near 7.
- Initial TP should be around the 7.9~8. Profit run the rest with trailing-stop.
- Stop-loss around 6.7 or a few points below it to have at least 1:3 risk/reward ratio.
*If the pullback is only around 50%~61.8% retracement, observe any reversal pattern for a potential trading opportunity.
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