MCP recently found a roadblock at the convergence of multiple resistance levels.
The Head-and-Shoulder Bottom pattern (Inverted H&S) remains valid for now. The neckline is also the immediate resistance area around 2.34. Immediate support at 1.86.
- A breakout from this H&S pattern will have a measured target around 3.5.
- Breakdown from support with price action moving towards the H&S head area will likely invalidate the Inverted H&S pattern.
Recent rally is still considered a DCB (Dead Cat Bounce) from the longer term downtrend line if it fails to break that trend.
If major support at 1.15 holds up from a sharp correction, potential Double-Bottom pattern will likely develop. A breakdown from 1.15 will confirm the DCB and price action will likely move towards new lows.
Note
This is just an update from the previous post "MCP: Potential DCB":
http://psetrends.blogspot.com/2016/02/mcp.html
Trading Plan
- Avoid for now.
- Buy only the breakout from Inverted H&S if it also breaks the longer downtrend line supported by above average volume.
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