SHLD Big Picture – Trading Range
- The resistance area has contained prices well.
- The support level, together with the resistance level, has defined a clear trading range. Furthermore, this trading range could be nested within a larger trading range as marked by the solid black lines.
- There were a few gaps within the trading range in both directions. However, none led to a break-out of the trading range.
SHLD Small Picture – Hikkake
- Prices broke down strongly.
- There were two bullish inside bars. Price broke out of the high of both inside bars.
- However, despite the two bullish breakouts, price has not even tested the high of an earlier outside bar.
Trading Setup Analysis
SHLD is in a trading range. It has gapped down after the last test of the top of the trading range.
Both inside bars had bullish break-outs in a bearish context. These are attractive low-risk setups for long traders who ignore the bearish signs. Hence, if the inside bar fails, these long traders would be trapped.
The bearish Hikkake pattern will profit from the trapped longs. However, the price target should not be too ambitious and should be placed within the trading range.
Learn more about the Hikkake pattern.