Analyzing the price action in Thursday's trend move: Brooks

Brooks Price Action Analysis of Thursday, Dec. 26

pending chart 2484

Trend from the first bar bull

  • Thursday, December 26, 2013
  • Bar 1 - Gap up but small bar. Always in long but probably trading range pa through next week so better to buy low of week sell high and scalp and be very selective. Bull breakout of bull channel so 60% chance will fail, failure soon. Targets above on daily so should go higher
  • Bar 2 - Trend from the first bar bull. Fail, failure breakout but 2 bull bodies, targets above so buyers at the low of week of the bar and probably scaling in lower
  • Bar 3 - Breakout pullback buy or long but consecutive buy climax and top of channel so low probability. Better to wait. Tight trading range so limit order order market
  • Bar 4 - Fail, failure breakout high of yesterday and top of channel second entry sell, final flag 44, ok swing for possible high of the day, but tight trading range, bad for scalping with stop entries unless using swing stop. Targets above, tight channel so not yet high probability
  • Bar 6 - Two legged pullback in a bull move 4, fail, failure two legged pullback in a bear move, always in long, but tight trading range, bad for scalping with stop entries unless using swing stop so swing or wait. Still swing sell or short, stop above 4, swing buy or long, stop below 1. Breakout mode
  • Bar 9 - Bull two inside bars, tight trading range, breakout mode. 50% chance breakout up and or down will succeed, 50% chance fail, failure
  • Bar 12 - Bull breakout, always in long, stop below 6, but weak breakout so lower probability. Target = top of channel
  • Bar 15 - Final flag top 19 and 44, micro double top, but small pullback bull, doji sellers below or signal bar, 7 bars without bear body so low probability. Possible high of the day
  • Bar 17 - Bear breakout follow through so probably always in short for test close of yesterday and trendline. For bulls, swing stop below 6 or 1. Neither side has high probability, but both have reward about 2x risk. Difficult to make money today and better to wait for most traders
  • Bar 21 - Twenty gap bars buy or long, possible triangle 1 5 17 20, two legged pullback in a bull move at moving average, but tight trading range, bad for scalping with stop entries unless using swing stop. Odds slightly favor bears after fail, failure breakout above channel. Target = trendline. Range should increase to at least 5 points with breakout up and or down. Tight trading range, possible triangle, breakout mode
  • Bar 26 - Wedge 4 13 but tight channel so low probability. Should hit trendline below but can get there sideways. Better to wait
  • [more Bar-by-Bar Analysis, Daily Webinar and Trading Course info at www.brookspriceaction.com and www.brookstradingcourse.com]
About the Author
Al Brooks

Al Brooks, M.D., is author of the Brooks Trading Course (27 hours of videos at BrooksTradingCourse.com), several books on Price action (Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader, Wiley, 2009, and the 500,000 word, three-book series, Trading Price Action, Wiley, 2012), and numerous articles in Futures Magazine. He also provides live intraday E-mini price action analysis and free end-of-day analysis on www.brookspriceaction.com.

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