BRCD – Brocade To Trade Higher…For Now

BRCD traded down to the 7.00 level today. This is very close to its 38% Fibonacci retracement off the March lows. It did this with large volume and could be ready for rebound, although the shorter trading time frames show that perhaps one short push lower is needed first.

Here is the trading scenario to look for with BRCD. BRCD is in its A wave of an ABC correction. It could trade further lower to 6.86 price level which would complete the A wave. If it does this or holds its low today, then its a buy. You can trade the B wave of the correction higher to 8.76 level.

The B wave should not trade to new highs in a short trading time frame unless there is an irregular correction in the works. BRCD’s longer term chart shows that it has completed a 5 wave sequence off its March low and a parent wave 1, so the current correction is anticipated to run its course before higher highs are made.

If the correction of today pushes much lower than the 38% level, than look for the rebound to trade within a triangle.

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By SSTtrader | November 24, 2009 | Watch List | 1 Comment |
  • daytrader

    Today BRCD traded past the prior low stated and came within 4 cents of the 38% Fibonacci retracement level we were looking for. What this appears to have accomplished for BRCD was solidify some of the final 5 wave corrective waves at lower time frames, meaning that BRCD sets up here for a trade at the 7.00 level.

    Same trading levels as before, however we should anticipate the move higher to be eminent now that these waves have been completed. I still do not see the final 5th wave on the one minute trading time frame. This test would either create a double bottom scenario or also break the 6.90 low of today perhaps again only by a few cents, however a tight stop needs to be respected here as this is truly trying to time the low of wave one instead of the retest wave 2.

    A trade alert will be set here to try and capture the trade of the B wave higher to the 8.76 level.