As I write this, the most bullish sectors are XLE (energy), XLP (consumer staples) and XLV (healthcare).
I should qualify this a bit…
When I say “bullish”, I mean sectors above or within single digit percentage points of the 200sma with open space to run, in terms of proximity to resistance.
For short term traders in this market, a rising XLV is music to their ears…
Reliable patterns and insane volatility.
They’re high risk, but parabolic moves are part and parcel of the trade in biotech and pharmaceuticals. And in that case, today’s chart might be of interest…
Check out Entrada Therapeutics, Inc. (TRDA):
We’re on the 375-minute chart above and for good reason…
With these types of stocks, you want to see periods of Price Compression.
From there, wait for the signal… or in this case, signals.
Before getting to the current price action, let’s look at the cluster of buy signals circled in the center of the chart.
TRDA alerted EIGHT Buy signals at the peak of its compression.
All of these came from Chris Hood’s custom indicators including the Squeeze Trading Tool 1.2A.
But this doesn’t mean that the trade is over…
The Support and Resistance channels are well-entrenched here, but what’s notable is the strength to bust through these levels.
This is a clear sign of positive volume which I’ve noted on the lower chart using the Volume indicator when buyers step in over the 20-period average…
(The 20-period is a personal preference.)
The Fibonacci Retracement is reversed here to illustrate the most recent leg down.
I want to point out that in these instances, the 50-61.8% levels are still paramount in watching for Buy signals. A climb above the two with solid Volume should push the price higher, but beware the resistance at ~$13.35.
If you look below on the Squeeze Trading Tool 1.2A and the Squeeze 4-Pack v8, the Stochastic, histogram, and multi-period dots are all flipping green or at least losing downside momentum.
And, of course, we have a Wedge pattern setting up…
The chart is worthy of an early entry, but I’d wait to size in.
Over ~$14.50 could be the better play.
(Disclosure: I hold no position in TRDA but intend to initiate a position in the next 30 days.)
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