July 27, 2016
Initial Target based on boxes
MRSGI- looking back
I had this then got bored but failed to buy on the breakout.
Looking back, the bullish crossover was generated when it closed at 4.04 after the bullish convergence was formed.
Its initial resistance was the midline of the box computed as 5.27, but the high that created a top box and served as resistance was 5.23.
Since IPOs like these have no historical resistances, we could use boxes or Fibonacci to determine areas of resistance.
Fibonacci extension and price action
Using Fibonacci extension levels, traders determine areas of resistance. Here, the twin candlesticks, a long green followed by an inverted hammer showed a sell off at 161.8% level . This is supposedly a tough level to beat. Thus traders lock in profit. On the break of this level today, traders bought back. It is in parabolic state. Thus, price action is the main driver of decision making. Just follow the trend as long as price is above EMA 4. Cut below.