MW was added as an “anticipatory” short trade on April 3rd while the stock was trading at 33.10. The reason for the short entry was in anticipation of what might later prove to be the formation of a second right shoulder of a very large Complex Head & Shoulders Pattern (a H&S pattern with two shoulders on each side instead of one). In viewing the updated 2-day period chart below, I believe that MW could possibly still be putting in the final touches of the second right shoulder but if so, prices would need to turn down very soon. If not, the symmetry of the pattern would quickly dissipate.
At the time of the short entry, I had suggested a stop over 35.30 but in reviewing the charts on various time frames today, I have decided to leave MW on as an Active Trade as well as add it as a new Short Trade Setup. For those that were stopped out, my apologies for not updating MW sooner. My intention was to remove the trade today as it has exceeded that stop by roughly 1 point but since I would be adding it back again anyway, I’ll just leave it as an Active Trade for now.
In hindsight, my previous suggested stop was too tight not only based on the symmetry of the pattern (which is still intact on this most recent thrust higher) but also from a risk/reward perspective, considering that the preferred target was over 15 points below the entry price yet the stop was just over 2 points above (better than a 7:1 R/R vs. the typical minimum of 3:1). In addition, the reason for adding it as a new Short Setup is two-fold: 1) Prices could still be in the final peaking stages of a second right shoulder, thereby providing an opportunity for an aggressive trader to begin scaling into a potential long-term swing trade and 2) MW is setting up for an objective shorter-term short trade based on this 4-hour period chart below. An aggressive trader could short here around 36.29 while a more conventional trader might wait until prices break below the uptrend line.