We identify a very steep and constant downtrend on this TradigView chart, which is typically not sustainable.
What makes the difference, though, is that our trading indicators clearly suggest a buying opportunity.
In particular, the three following required conditions to have a setup are met:
- The price and the RSI Exhaustion are in divergence (in fact, the price goes down, while the RSI Exhaustion goes up)
- The RSI Exhaustion is bearish exhausted (in fact, it is red)
- There is a confirmed top
When these three conditions happen together, there is a high chance of being in front of a great opportunity so we decide to take the trade and set the stop loss and the take profit.
In particular, we place the stop loss just below the most recent lowest level, while we exploit the major resistance drawn by the Levels and Zones, to set our target.