Descending Triangle Pattern:
Key Elements: The chart clearly depicts a descending triangle pattern with a horizontal resistance level around 2,620 and a descending trendline connecting lower highs.
Bearish Breakout: The price did break below the support trendline, indicating a bearish bias. However, it's essential to note that breakouts can be false.
Retest and Confirmation: The price retesting the broken support level could confirm the bearish breakout. If the price closes below the broken support level, it would strongly signal a continuation of the downtrend.
Trade Setup Considerations:
Short Entry: A short entry is a potential option, but it's vital to wait for confirmation of the bearish breakout. This confirmation could be:
A close below the broken support level.
Increased trading volume on the breakout candle.
Confirmation on a lower timeframe chart (e.g., 30-minute or 15-minute).
Stop-Loss (SL): Setting a stop-loss above the broken support level (around 2,380) would be more appropriate than 2,684. This would limit your risk better.
Take-Profit (TP): A TP target of 2,200 is plausible, but it's crucial to consider the broader market context and chart patterns for additional targets.
Long Entry: A long entry above the resistance level is not recommended, as the current market sentiment is bearish, and the price is likely to continue moving lower.
Important Considerations:
Risk Management: Always manage your risk carefully. You should have a pre-defined risk management strategy. This means setting a stop-loss order to limit your losses and not risking more than you can afford to lose.
False Breakouts: Remember that breakouts can be false. You should wait for confirmation of the bearish breakout before entering a trade.
Market Context: Always consider the broader market context and news events before entering any trade.
Remember: Trading is risky, and past performance does not guarantee future results.
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