Price on the Italy 40 Index or the IT40 index is setting up for potential short trades with price now rotating back into a major price flip level on the daily chart as I write this. Price recently smashed lower and through the major daily support level that had been holding price higher for the previous three weeks.
This daily chart support level has been a crucial and proven price flip level. If you zoom your daily chart out, you will see that not only has price been respecting this level in recent times, but this level has been a significant level in times gone past as well.
If we look at this chart from left to right, we can clearly see that there is no trend or obvious bias in play. It was just before breaking lower price had wound up into a tight consolidation boxing area and was winding tighter and tighter getting reading for a breakout.
Now that price has broken out lower and through the major support level, the old support level looks to become a really crucial level as to where price goes next in the coming days and weeks, depending if the levels hold or not, especially with price looking to rotate back higher and make a potential re-test.
If price does rotate back higher and back into the old support, you could look to see if the level holds as a price flip and new resistance area. This level could be a high probability level to hunt for potential short trades. Any potential short trades would need to be confirmed with A+ high probability bearish trigger signals, such as the ones we teach in the Lifetime Members Price Action Course. These trigger signals could be hunted on the intraday charts, such as the 4 hour or 1 hour time frame, like the chart I have below.
You would need to watch and read the price action behavior to make sure that the old support does hold as a new price flip and new resistance level. If price moves back higher and straight back above the resistance level to close back above, the price would once again flip and become a support level.
MAJOR IMPORTANT NOTE: Become a FREE *VIP* Class Member and receive behind closed door teachings not shown to the public! Sign up to become a student here:
Daily Chart – Major Daily Price Flip
1 Hour Chart – Potential Intraday Setups
Heya Julio,
yes; we watch a wide range of markets & Forex pairs. Like I often discuss, it is better to cherry pick the very best setups from many pairs, rather than to overtrade and feel like you have to trade from only a handful of markets.
Johnathon
god you trade some random pairs/ indices!