This chart starts to show some bullish momentum.
Price is managing to stay over the 50 day moving average and the stochastic indicator shows to be at the oversold area.
If stochastic crosses in a bullish move then certainly we might expect price to move higher.
A stop loss could be placed at number 5 below the swing low.
A target might be the next area of resistance as can be seen at number 6.
Now lets analyse the 4 hour chart. Here price does not seem to be ready.
Ideally we want to buy also on this chart an oversold stochastic cycle.
Price should be trying to move over the 50 day moving average.
But if the information is presented to us in this fashion then we just sit back and wait for the pullback.
Like this we get confirmation if our swing low is not taken out and if not then we buy low to sell high for a better risk to reward.
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