8-Step Stock Trading Plan Live Testing: Updated Week 3 Scenario (January 13–17, 2025)
As part of our ongoing live testing of the 8-Step Stock Trading Plan, we have updated our Week 3 scenario for URC. This update incorporates the latest price action and chart patterns from the past 30 days, along with the results of our trading activity on January 13, 2025. Below is a detailed description of the updated scenario, how it aligns with current market behavior, and the strategies we plan to implement.
Description of the Updated Week 3 Scenario
Key Support Levels:
Probable Support Level: Php77.07
Updated Stop-Loss Level: Php73.80
These levels have been revised based on the intraday low of Php73.80 recorded on January 13, indicating a potential bottom and temporary support.
Key Resistance Level:
Probable Resistance Level: Php80.70
This level remains critical, as it has been repeatedly tested without a successful breakout.
Target Zones:
1/3 Zone: Php85.00 (Next upside target)
2/3 Zone: Php95.00 (Mid-range profit-taking zone)
3/3 Zone: Php104.40 (Final profit-taking zone)
The updated scenario anticipates a possible breakout above Php80.70, with potential upside toward the 1/3, 2/3, and 3/3 zones. However, it also accounts for downside risk by adjusting the stop-loss to Php73.80.
Justification Based on the Past 30-Day Price Action
Consolidation Phase:
Over the past 30 days, URC’s price has been consolidating between Php77.07 and Php80.70, showing repeated tests of both support and resistance levels. This range-bound movement validates the revised support and resistance levels.Multiple Tests of Key Levels:
The support at Php77.07 has been tested several times and held strong, reinforcing its significance.
The resistance at Php80.70 has also been tested but remains unbroken, indicating persistent selling pressure at this level.
Intraday Volatility: The significant dip to Php73.80 on January 13, followed by a sharp recovery, suggests that buyers stepped in at lower levels, preventing further downside. This justifies setting the stop-loss slightly below Php73.80.
Overall, the updated scenario remains closely aligned with recent market behavior and incorporates new data from the latest trading sessions.
Expectations for Week 3
Bullish Breakout Above Php80.70: If the price breaks above Php80.70 with strong volume, we expect a rally toward the 1/3 Zone (Php85.00). This would signal a bullish trend and open the possibility for further upside toward the 2/3 Zone (Php95.00).
Continued Consolidation Between Php77.07 and Php80.70: If the price fails to break above resistance, we may see continued range-bound trading. Patience will be key in this scenario, as we wait for clearer signals before making further trades.
Breakdown Below Php77.07: If the price breaks below support, it could retest the Php73.80 level. A breakdown below Php73.80 would invalidate the bullish outlook and require a defensive strategy.
Updated Strategies for Week 3 Using the 8-Step Trading Plan
Step 1: Identify the Market Phase
Current Phase: Consolidation, with potential for a breakout or breakdown.
Action: Closely monitor the price action near the Php80.70 resistance and Php77.07 support levels.
Step 2: Position and Location
Position: The price remains below both the 20-MA and 200-MA, indicating a bearish overall position. However, a bullish reversal is possible if a breakout occurs.
Location: The price is near key support levels, making it an attractive area for potential entries if bullish signals appear.
Step 3: Assess Power Bars
Look for green power bars or narrow range bars near resistance, which could indicate a potential breakout.
Step 4: Entry
Enter long positions if the price breaks above Php80.70 with strong volume.
Alternatively, enter near Php77.07 if bullish reversal signals appear.
Step 5: Place a Stop-Loss
Use the updated stop-loss at Php73.80 to limit downside risk.
Step 6: Color Change
Watch for a color change from red to green near key support or resistance levels, signaling potential trend reversals.
Step 7: Profit Take
Take partial profits at the 1/3 Zone (Php85.00) if the price reaches this level.
Further profit-taking can occur at the 2/3 Zone (Php95.00) and 3/3 Zone (Php104.40) if the bullish trend continues.
Step 8: Re-entry
Re-enter positions on pullbacks to support levels if the breakout sustains and the trend remains strong.
Conclusion
The updated Week 3 scenario reflects our commitment to adapting our strategy based on real-time market behavior. With the revised support, resistance, and stop-loss levels, we are well-positioned to respond to either a breakout or continued consolidation. Our strategy for the week focuses on closely monitoring key levels, executing trades based on confirmed signals, and managing risk effectively.
We will continue to update you on our progress as we move through Week 3. Stay tuned for further insights and results from our live testing of the 8-Step Stock Trading Plan!
Disclaimer: This post is for informational purposes only and should not be considered financial advice. Always do your own research before making any trading decisions.
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