Trader’s Narrative

This is what happens when you actually pay your credit card bills on time people!

Capital One was taken to the back of the tool shed today due to a dissapointing second quarter earnings report. Price gapped down past $82 which had been support in recent months. It then sliced through the last vestige of support at $80 in early morning trading. After such a monstrous expansion in one direction, price paused and retraced lightly upwards for the next three candles.

After which the shellacking resumed. On the 15 minute chart, this pause offered a defined risk entry in the direction of the new trend (red circle). Using Fibonacci to frame the gap down, the target was the 38.2% extension at $77.67 - which was reached just after noon.

Interestingly enough, there was a neat little hammer candlestick that formed at 1pm which marked the exhaustion of intraday selling (purple oval). Accompanying the hammer, I didn’t notice a spike in volume which I’ve seen before. But there was a slight uptick in volume.