image of TCO trading chart for stocks trade dea of the week

TCO Stocks Trade Idea – Long

The Wave5trade Elliott Wave Indicator suite for the Thinkorswim Platform has been used to put together this LONG Stocks Trade Idea on TCO.  As per the chart on the video below the overall bullish trend can be seen and the automated Elliott Wave count indicates the TCO (Taubman) stock has pulled back against the main Bullish trend on a Wave 4.  The wave5trade strategy involves trading the 5th Wave of the Elliott Wave sequence as it is the highest probability move in a “with trend” trade.  The Wave 4 has pulled back and found support in the Green Pullback zone, which indicates an 85% probability that the 5th Wave will go on and make a new high in this current bullish trend. The Pullback zones are part of our Elliott Wave Indicator Suite.  We will discuss the remainder of the potential Long trade setup on TCO below in the Video. The Setup figures for this potential Long are also below the video in this post.

There are quite a few elements that are included in our Elliott Wave Indicator Suite for the NinjaTrader NT8, Thinkorswim and TradeStation Platforms. Lets discuss in order to build up the picture of this potential Long trading opportunity on TCO.

 

  1. The Wave 4 pullback has found support in the Green Zone of our Specially programmed zones to indicate an 85% probability of the 5th wave making a new high.
  2. The 5/35 Oscillator (included in our indicator suite) shows the Wave 4 pullback is between 90% and 140% of the highest point on the oscillator during the 3rd wave.
  3. The Stochastic has crossed over in the overbought zone and is heading up.
  4. The Risk to Reward is 1:2 to the automated Target zone that our Elliott Wave Indicator Suite plots on the chart. So risking 1% of trading balance between stop loss and entry gives a potential reward of 2% into the target zone.  The minimum Risk to Reward suggested when trading the 5th Wave is 1:1.6 so in this particular case we have a strong Risk to Reward into the target zone.
  5. The Entry strategy is developed using previous price action AND importantly above the 6/4 Moving Average High (Green MA line on chart) which is also part of our Elliott Wave trading indicator suite.
So in this case we can see that we have a great deal of evidence that the Wave 4 has behaved as expected and we have a good risk to reward for the trade.  This gives a high probability of success for a Long Trade on TCO with the following.

 

Long Entry at $63.42, which is above the 6/4 MA High.

Stop Loss at $60.98 which is below the wave 4 low

Target Zone $68.50

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