today for something a little different I am looking at a chart that is in a decent sideways range and is showing some good characteristics for a bounce off the low-end.
The area that I have circled shows the price breaching the support level but you should note the very long-tailed candle which may be a good initial sign of a rejection of this level. Secondly you can see that the subsequent candle provided an engulfing pattern of the first which is the second bullish signal. Lastly, there was a crossover of the %k and %d lines on the Stochastic Oscillator which may be pointing toward a change in the momentum.
My preference on this trade setup would be to see the share price higher at the open of the next session and then make a decision from there depending on momentum that we see. I think an appropriate stop level would be $42.95 (just below the low of the last candle) with the initial profit target set for $47.12. Based on the closing price from Friday this would represent a risk:reward ratio of around 1:2 which is appropriate for this type of trade.
All the best,