Peerless gapped down with unusually high volume. The first candle closed down with a faily long lower tail. The next few candles were successive narrow range candles each closing negative and getting closer to the low of the opening range:
Finally, the price contracted to a very tight candle which also closed down. This offered a great opportunity to enter short and go with the trend. After, the price broke down and continued to expand to the downside.
It is important to note that on the daily, PRLS had broken down below its previous support of $5.80-6. Eventhough you’re not trading on a longer time frame, it is always a good idea to glance in its general direction.
Finally, what I found interesting was the large volume that accompanied the hammer at 11 am (purple circle). It signalled the end of the second expansion phase as price bounced higher and went into a range for the lunch hour.
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