Today, June 10, 2020, a trading signal was formed on the shares of Aeroflot (AFLT). On the June 10 daily chart, divergence has formed, a discrepancy between the histogram of the OsMA indicator and the price (indicated by blue lines). This discrepancy indicates the weakness of the bulls and the growing strength of the bears. Price wanted to test the round mark of 100, which was previously observed and is a psychological level. In addition, the price tried to break through the moving average of 200 (green line).
On June 9, a bearish volume formed on the Better Volumes indicator (with parameter 12 for the daily time frame). On the Price Deviation indicator (with parameter 50), the 20% value that was observed in June 2016 was reached. Which indicates a great point for a short position.
At the moment, the price is 11.3% above the moving average of 50, the divergence and rebound from the moving average of 200 confirm our theory of a short position. I prefer to set a stop loss equal to two maximum ATPs (35), which in this case will be 101 for Aeroflot (AFLT) stocks. Another option is to put about 98.5-99 rubles per share for the last peak.
Therefore, the plan for trading in securities is as follows – selling at current prices (about 89.1) with setting a take on 55 and stop loss 101. The ratio of possible profit to risk is 2.85 to 1. Do not forget to follow the rules of risk management!