A deep pullback after breaking new highs, a bitter exit failing to defend the support line

Reviewing Prediction vs. Actual Result

An entry was attempted as the stock rose 8% while breaking to a new 52-week high, but the actual result was a loss of -10.8%, resulting in a final FAILED judgment. At the time of entry, a pullback trading strategy was established to confirm the short-term support line ($74.23) near the 20-day resistance line ($89.45). However, on October 22, a sharp decline occurred with an open of 85.26, a low of 79.57, and a close of 80.18, ultimately leading to a hit at or below the set stop-loss price ($74.23). Even though trading volume was relatively quiet at 0.70x the 20-day average and the number of news items regarding the energy theme was also on a falling trend, it is regrettable that we relied too heavily on the persistence of upward momentum and took the contraction in supply and demand too lightly.

What to Watch in the Next Analysis

Learning from this trading failure, when approaching stocks hitting 52-week highs in the future, I will more strictly evaluate not only the distance between resistance and support levels, but also the overall news trends of the theme (whether the trend is downward) and whether volume supports the move. In particular, keeping in mind that the success probability of a pullback rebound may decrease in a sluggish supply-and-demand environment where volume falls short of 1x, I will apply conservative risk management by responding more agilely to order book volatility, even before reaching the stop-loss threshold.