These markets have exploded to the upside today as we thought ( see previous articles) and traders who took the stochastic crossover have fantastic gains on the day.
Can this market continue its upward momentum? Lets look at the trade in more detail.
Low risk and high reward trade
This market was trading near support, so it was a great place to enter if you were bullish, as the contracts were trading right at key nearby support.
While we said traders could enter at the support level, we waited for the stochastic crossover to confirm the move.
One of the most important points in trading an upward move is to look for some upward momentum (Even if you think support is going to hold) get confirmation of strength and the stochastic crossover got us the signal and in the market.
Can this market go to new highs?
We dont know and neither does anyone else.
This market is driven by trader psychology more than anything else at present, but if we step back and look at the charts, we can see things with a clearer none emotional perspective.
A break above resistance points to test of the highs
The huge move up is seeing prices right at the middle of the Bollinger band (resistance), if prices can close above this level tonight or near the highs we would stay with the trade.
If prices get past the mid bollinger band odds favour a run to new highs.
Its important here to keep an eye on how the trade finishes on the day and opens tomorrow. Watch for resistance at the mid Bollinger band and stochastic momentum to stay positive.
Note: Stochastics are great timing tool, to get into trades and the bollinger band represents a great way to define resistance, support and objectives. These two tools are a powerful combination when used in conjunction with charts - learn to use them and enhance your trading.
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