DCA Play $SOXL | Good R:R

12 févr.

here are my key observations based 4-hour chart on SOXL

Price is in a tight consolidation. must break $28.54 with an abs close to see upside potential.
If rejected, a revisit of $26.35 or lower could happen.

However, this sets us up for a great averaging play
$26.35 is a strong support, meaning price may bounce before reaching $25.57, a logical place to accumulate.
SL @ $23.77 (or close =< .79) a break below 23.80 will mean further downside. (best to confirm with close)
T1 @ $30.00 first aligns with 50% Fib. standard reversal area.
T2 @ $32.70 to gap fill if momentum is persists

Why this works:
no need to predict the exact bottom, nature of cost avg'ing
earlier rebound to $25.57 allows you to maintain exposure
scaling out at $30 and $32.70 locks in profits while allowing more upside
Good risk-reward ratio (~1:2.5 or better)

Risks to consider:
breaks <$23.79, will go lower (possibly retesting $22-$21 range)
If volume remains weak, recovery to $30 may take longer than expected
semiconductors remain somewhat bearish, meaning SOXL could lag even if it stabilizes a bit

Watch for volume confirmation on the bounce

Play for T2: In the event that price reclaims $28.54 quickly, consider adding to the position for momentum play to $30.00

Other supporting indicators:
a descending wedge has formed, this occurs after a downtrend where price is making lower highs and lower lows, but the slope of the downward move is narrowing; a bullish signal because it shows sellers losing strength, and a breakout to the upside is likely.

Last Vol was at 43.88M, lots of involvement
Implied Volatility was at 91.45%
β 4.32 : market expects large swings
Put to Call ratio (0.67) indicate to me that there are more calls than puts out, a bullish sentiment for those who aren't familiar with options.

il y a 5 jours

Transaction en cours

TARGET 1 REACHED
T2 still active.