CSCO and Inverted Hammer:
"...CSCO on 10/25 had an inverted hammer. How would you have set up the buy stop for 10/26? Do you consider the bar from 10/27 (this Friday) to be a last bearish engulfing pattern supporting a bottom for CSCO?"
I would not buy or sell CSCO after the invested hammer and this is why. First, let's take all the lines off that were on this chart, and clean it up so that we are only looking at this last leg down on the daily chart. You can see that it's now inside a 1-2-3 zone, marked out by the pair of horizontal blue lines: ispeculator.com
More info on 1-2-3: ispeculator.com
The only way I would buy it would be on a 2B test of bottom, meaning that the low from Oct 11 at $48 11/16 was broken on a test. IF it can reverse on the next day, THEN I would buy it, with a buy stop just above the high of the day that it made a new marginal low.
Right now, CSCO is still trading under the 20-day EMA, pending test of the 10/11 low, and unless it can reverse and make a higher low right here, probability of the move is to the downside.
On the weekly chart, we want to know if this is a failing bounce, followed by a move to the downside, according to the trajectory that I have outlined here in blue: ispeculator.com
Teresa |
