TMF: Bullish Setup

By: TheWaveTrading | Mon, Feb 17, 2014
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Entry Date (02/14/14); Long 49.95; Stop 49,25; Target 51

Reasons: Tactical short-term trade based upon the internal structure of the current bounce and the scenario of a pullback of the equity market.

TLT Brief Elliott Wave analysis:

The decline from the February 3 high, so far, has unfolded a 3-wave down leg (Corrective decline), therefore I am assuming that the advance from the December 31 low to the February 3 high can be the wave (A) of a potential Zig Zag up, hence the current pullback should be the wave (B).

On February 12 the Hammer candlestick followed by a gap up are suggesting a probable short-term pause within a larger corrective wave (B) pattern that could bottom in the area of the 50 dma (The MACD has a bearish cross favoring a larger wave (B) correction).

If a short-term bottom is in place the current countertrend rebound can reach the resistance zone located in the range 107.22-107.38 (The 200 dma should prevent further follow-through in a countertrend bounce).

TLT Daily Chart
Larger Image

In the 60 min chart below we can see that the internal structure of the rebound from the February 12 low is suggesting probable that at least a Zig Zag up is underway.

If 106.27 holds the equality extension target is located at 107.38 (Coinciding with the 200 dma).

TLT 60-Minute Chart
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Last Friday I have opened a long position in TMF at 49.95 with a stop at 49.25 (Hopefully tomorrow I will raise it to 49.60).

If the upward Zig Zag pans out the equality extension target is located at 51.

TMF 60-Minute Chart
Larger Image

 


 

TheWaveTrading

Author: TheWaveTrading

TheWaveTrading

Contact: If you would like to contact the author, you can e-mail him at thewavetrading@gmail.com

The main objective of this project is to share my views on several markets and asset classes.

In the initial stage TWT website will be a free service.

My main focus will be the equity market with SPX being the leader but I will also follow US equity sectors, major European indices, fixed income, currencies and commodities markets.

My analysis is based upon traditional Technical Analysis, Elliot Wave guidelines and investor sentiment.

My goal is to establish the most likely path that the price of a particular asset will undertake and profit through ETF instruments both on the long and short side and mainly with leveraged ones (2 x & 3 x).

The advantage of ETF investments is that it allows getting involved in equity indices & sectors, currencies, fixed income, commodities etc.

Therefore the main purpose of TWT will be to establish investment strategies regardless if the market is in an up trend or in a down trend, leveraging the chosen scenario while managing the risk by establishing protective stop losses.

Hence I will always define the risk, I will try to let winners run the wave and I will cut the losses if my strategy is wrong.

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