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.
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.