POT - Potash - Inverse C&H
I was stalking POT on Friday and noticed it was carving out an inverse C&H type pattern. You probably could argue it had a double handle.
I liked how the R1 (top yellow beaded line) was right above and POT was failing to hold onto that area as the market continued to exhibit weakness. My stop point was a bit conservative (and I need to work on making those a bit tighter). I also liked how volume had dried up during the handle formations (highlighted oval area in the 2nd image).
I entered short on a break of the 162.20-25 area, over which the C&H had been basing. Volume expanded nicely and POT quickly hit its target.
My target exit area was just above the pivot point (pink beaded line). Normally I'd target the 200% Fibonacci extension level, but the pivot point was so close.
POT may continue to show weakness on Monday after basing in the 159.50-160.50 area. Resistance to an all time high is just above at the 165 area.
POT will also be on my radar, as a long setup, as it is one of the HCPG picks for this week.
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