$ONON - IMPORTANT NOTE ON STOP LOSSES -
Added 2023-11-16 05:26:47 +0000 UTCHow about this for a dump and pump after earnings?
$ONON reported this week and it was a double beat with EPS beating by 40% and a near 50% YoY increase in revenue which is remarkable but at the opening on Tuesday it dropped over -10% to $24....to the 0.887 Fib (support). This was a clear stop loss raid as the price triggered the SL and then bounced immediately, it then climbed to $28 yesterday with an +8% day.
I understand the importance of Stop Losses but we need to be aware of how important it is not to set a stop loss to tight.
In this case, a stop loss BELOW the previous low at $23 would have been appropriate, you need to give the price action time to recover, stop loss raiding is a real tactic, especially for companies with high growth, as MM's know exactly where people set their stop losses, usually -10% lower than standard support lines.
Since $ONON found support on the 0.887 Fib and bounced to the trend line, a breakout here would put this into Wave 3 and I have added in the 1.618 Fib at $33.48.
