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After reporting a disapointing first quarter, Joseph A. Banks Clothiers gapped up today on the news that sales in June had gone up 8.5%:
The first bar was a wide range down candle. The second was an almost perfect hammer candlestick which formed close to the low of the opening range with the lower tail of the candle going as low as the opening range’s low.
From there price rallied. A good low risk entry was above the second candle (hammer) with a stop loss just below the low of the opening range. With entries below the high of the opening range, it’s important to watch how price behaves when it again reaches resistance at the opening range high.
JOSB had a shallow pull back when it got close to the high of the opening range. You can see this pullback better if you look at a shorter time frame than 15 minutes. But even on the 15 minute chart above it is visible in the fourth candle’s tail. Price then continued to advance and broke through $25.17 decisively. From then on it just kept going, reaching the 38.2% Fibonacci extension and beyond.
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