HUM - island reversal

2023年8月6日

HUM is in the early stages of an island bottom reversal. Island reversals are interesting patterns. They are formed by two gaps that leave a stranded range of price action. They have failure rates of 13% for island tops and 17% for bottoms. Island bottom reversals have an average rise of 34% and a most likely rise of 20%. Island bottoms also throw back to the top of the gap 70% of the time, making entry planning very important. The throwback normally occurs within 9 days


Note that the VWAP from from the November 2022 ATH acted as resistance at the top of the range for the island. Then VWAP from the most recent high before the island formed acted as overhead resistance and stalled price on the breakout. We also have the 200SMA above that is likely to be an area of resistance.


Game plan:
Entry ~$468 which is the fib 0.382 of the retrace from most recent high prior to the island, aligns closely to a throw back to the top of the gap of the island, and the VWAP from the high prior to formation (which should now be strong support)
Take profit - ~$497 which is close to the 0.618 and the 200SMA
Stop loss ~$456.33 which would be 50% of a 20 period ATR below the VWAP from the high prior to the island formation.

2023年8月17日

註釋

Update:
This one is still in play. Price got above the VWAP from the Nov 2022 high and then rejected at the 200SMA. I'm still looking for it to come back and find support at the top of the island or the VWAP from the most recent high.