Hubert Senters here.
Let’s take a look at a good old-fashioned support and resistance lesson. So we’re looking at WDAY, Work Day Incorporated. And obviously it’s in a nice little vertical move above the cloud here. I call this the pain box here. This is just a pain and hard to trade when it goes down, up, down up, down up and it stays in that consolidation box. It’s at the pain box.
It’s hard to trade out of. But what we’re looking for in this situation is how to properly use good old-fashioned support and resistance so we had a resistance area around here and usually resistance and or support is an area of interest it’s not a pinpoint accurate zone.
So in this area right here we have a support area. Here we have the resistance area. Now, since Work Day, WDAY has broken successfully out of this overhead resistance that was keeping it trapped in that pain box when it pulls back that should now act as support. So in other words if you get a nice little pullback. I’ll use a little ink here.
A little pullback you come back down here it should hold in this zone around here then bounce out of there and then go substantially higher so how do you play that? Well, one way you can do it is you can use Fibonacci. You can go from point one to point two and that would line up right there and see how it overlaps where if it went a little bit higher there you go.
See how it would pull into that old resistance which is now new support for it and a $50 percent retracement that would line up perfectly so on that zone anywhere from here to there and then ramp up and take out the most recent high which right now would be $115 so in other words it would pull back here.
You’d be looking to buy anywhere in the $140 to $133 area from here to there so you’d be looking to buy it from about $140 down to $133. So it’s a good low zone of interest to buy. And then as it goes back up your initial target would be $151. And that’s how you would do it.
Good luck. Hope it helps. And I’ll see you on the next video.
Hubert.
