I’m following PUMA’s bullish cycle on the weekly chart and technically we can see a further continuation up. This is why I will be looking to buy dips on the lower time frames as long as we get a good risk:reward for our entry. Now let’s have a look at the analysis.

PUMA W1 Chart

Price broke above the resistance zone around 215.50 and it is now aiming 245.00 or so. This is the zone which the price should reach according the the weekly bullish cycle.

PUMA D1 Chart

There is already bearish divergence forming. The shorter term daily cycle (red) creates magnetic levels slightly below the current market price and near the 245.00 zone as well. This is a perfect confirmation for us – daily and weekly cycles coinciding.

I have also plotted 2 up trend lines which we might use for the long entry as dynamic supportive zones.

PUMA H4 Chart

On the H4 chart we find another up trend line, the most recent one which i have also added. The idea is that we want to see a retrace, preferably in two waves down. Once that retrace finds a stop around the dynamic supportive zone and/or horizontal support levels we can go ahead and buy.

Here is an example of how the correction could look like. Of course wait for bullish divergence to appear between the two waves down (the 2 red arrows) which will give us a sign that the correction is over.

Ideally the price will re-test the 215.50 level and complete the divergence with a nice bullish candle pattern. We want to place the stop loss below it as this level seems to be very strong.

Final target should be 245.00 or so slightly below (watch out of bearish divergence). For initial target use 229.00.

Yours,

Vladimir

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