Ascending Triangle with Bearish Divergence in a Downtrend
MO has been in a downtrend for a while now. Currently, there is an ascending triangle pattern occurring, with Class B bearish divergence on both oscillators. If the trend is your friend, and the technical analysis on the oscillators are respected, then there's an indication of a potential shorting opportunity. The measured move of this pattern for a short almost lines up with the 786 fib retrace, for a potential profit of approximately 43.5%. We would place our stoploss at Dow's 50% retracement.
I am told by other traders and analysts wiser than I that this is not exactly a low risk trade. We are in a market that the Fed is willing to prop up no matter what, and during high stress situations such as a pandemic, people are prone to fall back on habits including smoking cigarettes (even though I would think that a very unwise decision considering this disease). So, this trade could end up falling apart. For that reason, it might be wisest to void entering a position until this trade breaks out to the downside of the ascending triangle.
I am told by other traders and analysts wiser than I that this is not exactly a low risk trade. We are in a market that the Fed is willing to prop up no matter what, and during high stress situations such as a pandemic, people are prone to fall back on habits including smoking cigarettes (even though I would think that a very unwise decision considering this disease). So, this trade could end up falling apart. For that reason, it might be wisest to void entering a position until this trade breaks out to the downside of the ascending triangle.