Dash completing breakout-retest formation (BULLISH)

6 set 2018

Dash broke above the 4-month trend line resistance last week. After the breakout occurred, price action comfortably closed above the trend line resistance. In such occasions, the price either moves upside in almost a vertical manner (this happens in strong uptrends) or the price comes back to the crime scene and re-tests the broken resistance, now in the form of a support. This formation is called a Breakout-Retest formation. The way to trade this formation is to enter a trade in the direction of the breakout using the breakout-retest level as your entry price. As you can see on the chart, the price touched the broken trend line and immediately raced higher. A stop should be placed below the trend line. The profit-taking areas can be defined based on your risk management plan. My advice is to have your first profit taking area around 100 DMA level while the second zone is just above consisting of 38.2% and a horizontal block of the resistance.