$JD | Potential long setup

Potential reversal at the .618

If we just K.I.S.S. we might just get lucky.. at least that’s the idea! Right..??

Trade idea:

Potential long scenario playing out that is worth the shot for me, with proper risk management of course. For discussion purposes this is a very small trade in my portfolio, <1/2% of overall portfolio..

Trade:

I have drawn a Fibonacci from the wick low of ~$20.87 to the wick high of ~$46.81 on the monthly candle chart and you can see that the price is currently trading at the .618 fib. I have taken a trade at this level in anticipation of a reversal, which may or may not occur. There are tons of trades out there like the one I have mentioned, you don’t have to be right all of the time or even a majority of the time, you just have to know how to manage risk and take losses/profits at the right time.

Trade parameters:

Buy at the .618 fib or current market price: $31.22

Risk/Reward: 1:7.31🤑
(Risk 14% for potential 108%)

SL @ next fib zone .786: $26.69

For profit zones I have ran a fib from the top @ $108.44 to the bottom at $20.87 and will be using the fib zones as TP zones. The 3 different zones are listed below:

TP1: .236 fib @ ~$41.33 (~32%)

TP2: .382 fib @ ~$54.16 (~73%)

TP3: .50 fib @ ~$64.43 (~106%)


Estimated time frame for all 3 targets to be hit: 1-3 years


It is best to come up with a strategy before hand as to how much you plan to take at each level. For me, I plan on selling 1/4 at the first zone, 1/2 of what’s remaining at the next zone and then the rest at the final zone (may let a share or 2 ride for fun). Whether or not any of these zones are hit is obviously all up to the stock and whether it cooperates with my thesis! I chose to post this trade because I like the risk/reward opportunity here. If anyone has any opinions, would love to hear them!

Thanks and HaPpY tRaDiNg!


NOT FINANCIAL ADVICE!!!