Three Line Price Break stock pick: Coherent (COHR)

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Since picking Dolby and Arch Capital stocks for long trades, today Three Line Price Break trading system suggests short-selling Coherent stock in case COHR shares trade below yesterday’s low at $52.57. The signal includes a red candle printing a new 4-day low, following three green successive candles in the box chart.

cohr-daily-stock-chart

If the signal is confirmed by a new low and resistance level at $55.15 holds, maybe the 3-month uptrend will come to an end. $52-55 area has acted both as support and resistance level before for Coherent stock.

cohr-weekly-stock-chart

What could the future bring for COHR stock? Perhaps a downswing to $40 or a breakout to all-time high at $65. But that doesn’t really matter, since according to the strategy the stop loss should be placed at $55.20 protecting our capital and the profit target needs to be placed just at 2 times the length of the red candle, that is at $48.50. If traders sell short at $52.50, the reward-risk ratio of this trade comes down to 1.5 – 1. Of course we may scale out and only trade out half of the position at the first profit target, willing to gamble on a stronger downtrend.

Disclaimer: I’m long DLB, ACGL and plan to initiate a short entry at COHR within the next 48 hours.

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Jim is an investing and gambling writer, trader, sports bettor and poker player coming from Greece. By gambling and investing with real money online, he puts his money where his mouth is. He also writes about his success or failure. Connect with Jim: StockTwits | TradingView