Possible ARNC Swing Trade Setting Up

2020年5月26日

ARNC might be setting something up.
- Price on Friday 5/22/2020 rose a fair amount on a little greater than average volume. This is a sign of some strength.
- The 20dMA is about to cross the 50dMA. This would be a stronger sign of strength.
- If price crosses and stays above the $12.74 Fib line, then the $16.82 Fib line and the next $20.12 Fib line could be in reach.

For a swing trade, we'll be looking to get in around $13.28 with a target around $16.70 +26% with a stop loss around $11.29 -15%. The problem here is our profit to loss ratio is way too small. We're risking -15% to gain +26%. 

We're looking for trades where we gain at least 3 times our risk.

So if our risk is -15%, then we're looking for a gain at least +45%. The last bullet point above tells us the next Fib line is at $20.12. If we make our target price $19.91, our gain raises to +50%.

So the question becomes, what would it take for price to risk fairly quickly to $19.91? It would take a very strong move over the next few days. 

We're looking for more volume here. If price can rise the next 3 to 4 days on volume, then we have a strong upward move. The 20dMA will cross the 50dMA, which is a strong bullish move. And we'll be above the $12.74 Fib line, so it will act as support.

Keep an eye on ARNC this week if the market is bullish.