It’s been two weeks since I first posted this ZRX weekly divergence setup and I’m happy to report that as of today this trade is nearly 13% in profit. The next move is to move the stop loss a few percentage points above entry so that no matter what happens in the market, the trade won’t end up a loser.
Things are looking very good at the moment and the target still stands. I’ve posted an updated chart below, with some notes that go with the previous analysis.
Short-term players may be looking to take profits here at the 12EMA. Next profit taking zone looks to be around the 26EMA at $0.35.
I noted in the previous post about how divergence is stronger on higher timeframes. This is a weekly chart, meaning it might take a while to play out. The trade has since moved about 1% a day in profit on average.
If you are unfamiliar with divergence, check out my post on how to spot big market moves using RSI divergence.
Another key indication was found in the MACD indicator. We are now seeing higher highs on both the orange and blue lines, the former being more significant.
I’ve noted a new RSI resistance that needs to be broken to stay bullish. Also notice we are now making new highs on the volume and we are only mid-way through the week, these are all bullish signs to me.
Previous chart is posted below for reference: