The XJO (ASX200) has sold off from the peak made on August 25th following the SPX(US500) and Nasdaq during uncertain global times and Covid numbers starting to increase again in Europe. While the XJO continued to fall in the past 5 trading days, MSB has experienced supreme buying pressure continuing to retest $5.00.

MSB

MSB is a Bio – Pharmaceutical company that offers products in the area of cardiovascular, spine orthopedic disorders, oncology, hematology, and immune-mediated and inflammatory diseases.

MSB

Key Points:

  • Price holding above the 200 EMA
  • Price holding above the 50 EMA
  • Bullish wedge pattern below range break out
  • Fibonacci 61.8% level providing support at $5.00
  • Volume increasing showcasing buyers’ momentum
  • RSI also breaking trendline
  • Superior risk to reward
  • SPX and NAS100 both in the green overnight

Key Levels:

Support – $5.00, 50 EMA, 200 EMA

Resistance – $5.25, $5.35

Entry Zone:

Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.

Optimal Entry – $5.05

Supporting Entry – $5.10

Candle Reversals for entry

  • Bullish Hammer
  • Bullish Engulfing
  • Bullish PiercingCandlestick

 

The Risk:

As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.

If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.

IF: Price breaks below $5.00 and violates 50 EMA– this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.

Reward / Reward Targets:

Optimal Entry $5.05 – Target 1 $5.25 = 3.3x Reward to Risk

Optimal Entry $5.05 – Target 2 $5.35 = 5x Reward to Risk

Supporting Entry 5.10 – Target 1 $5.25 = 1.6x Reward to Risk

Supporting Entry 5.10 – Target 2 $5.35 = 2.6x Reward to Risk