Gartley Strategy – Shanghai Electric update

Hi,

I posted details of an ABC or Gartley sell set up in this stock on 20 Jan with a follow up post on  30 Jan.

Today, price has bounced off an overlap and trend line support. On that basis some defensive action, moving the stop closer may be appropriate. I’ve outlined this on the chart below for readers following this set up.

 

Shanghai Electric (HKSE 2727) - Daily. Source: Bloomberg

The strategy of moving the stop now is based on the logic that failure to overlap conclusively below the last major peak at “A” represents a failure warning for the downtrend being followed. We want price to overlap through “A” increasing the chances that the uptrend ending at “C” was weak and corrective in nature with a new major downtrend now in prospect.

The strategy allows some tolerance under “A” to be more certain of overlap and I have used the dashed red line to define a support zone. This coincides with the black trend line.

This strategy moves the stop to the entry level if the overlap support zone is rejected. On that basis, if the stop is triggered the trade should break even or result in only a small loss depending on financing costs.

Cheers

Ric

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
This entry was posted in Market, Shares, Stocks, Trading and tagged , , , . Bookmark the permalink.

2 Responses to Gartley Strategy – Shanghai Electric update

  1. Randall Yates says:

    you can’t trade this on Tracker can you??

    • Ric Spooner says:

      Hi Randall,

      Yes you can trade this CFD on Tracker. We currently offer 312 CFDs over companies listed in Hong Kong. You can access this CFD via the Product Library. Just type Shanghai Electric or 2727 into the search box

      Cheers
      Ric

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