Here is my approach: Firstly, price has been going down, and nothing I have seen (yet) suggests that is going to stop. I would only sell for now. However, if/when price tests $1200, I think we can expect a few things. The first is that price will dip lower – perhaps down to $1195 before any bounce is possible. There will be lots of buy orders at $1200 with tight stops just below there. Before any sustained move up can happen, I think those initial stop-losses will be gobbled up.
What happens at $1200 will be telling. If price doesn’t bounce, well, then the prevailing downtrend remains, and I’ll keep on selling.
While price remains in that channel, I’m not interested in the slightest. If/when price was to break down below it, at ideally give us a bit of the throwback to the underside, then trade on.
I hope some of this analysis is useful – if you’re interested in more check out the original article.
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