Fortescue Metals Group #FMG

[Costa]

Definitely Fortescue Metals looking at this one because of the connection we've just made.

Only one chart required for this as it has behaved very harmonically. I am sure the fundamentals can be covered by those who know that stuff far better than I could.

What immediately stood out on this is the SP was recently trading at a discount of 50% from the highs of July 2021. Even today it is still at an approx 38% discount on that high.

Daily Chart.

As you can see from the patterns on the chart they have until now behaved well. At this time, we are within the bullish Shark pattern with HSI confirmation and the check back. It may have stalled last couple of trading days but the set up here i do like. Terminal bar did hold even with the stall. I have followed this for a while to be honest had did originally have my eye on the 15 level (886 swing level), close to the HOP and set an alert, but not hit and we did get a support on the retest of the OB.

Given the price action a day or so of watching i may slice into position here between the 16.4 level and lower (HOP), should that happen. I don't mind buying higher but would need to see a very bullish break up candle which we're not seeing right now. Safety net (stop levels for me would be around the November 2021 lows.

Given what i would be looking for which is a Type 1 reaction trade, the initial target is a modest 19.39. The fantastic thing about Harmonic analysis is it provides a framework...guidelines if you will and within the target range...following that framework would look for a Type 2 return and eventual Type reversal up to the 22.17 target. Obviously there is much price to traverse between now and then.

[Costa]

So, the pattern re adjusted as it continued to develop. No big deal. A very obvious entry at that HSI and following 3 bar breakout. Boom!

Target 1 netted 20% but this offered more with that gap up and beyond T1, which held. T2 should it hit offers 40% Lovely Type 1 move and again shows the value. Manage stops.

We're in Type 2 Return territory but the indicators are against us so lets see what develops here.