In this article, we are drawing Pitchfork channels on DJIA.
On the daily DJIA chart, we can see that the instrument has formed a downtrend Pitchfork channel connecting three swing points 26616 the highest level in Jan’18 with the lowest level 23360 in Feb’18 and a swing pullback to 25402 in June’18. The instrument is now near the 24500 level of the downside channel line, and we should see a breakout or rejection here.
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We have used the combination of the top-down trading analysis and the Andrews Pitchfork channels to get to a trading entry stop loss levels and targets. On the H1 chart, the confluence of the two Pitchfork channels, the daily channel and H1 channel in making, is giving us the entry point, the stop loss level and take profit level. Traders should enter the trade at the market or on a possible start of the week bounce to 24600 level. The stop loss should be above the 24600 and a take profit at the lower H1 channel line 23600 level.
Happy trading! (click on the chart to enlarge it)
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