Well, resistance broken out of becomes support. Support is often backtested to see if it will hold. Think of it as a man walking out onto the ice and then stomping his foot a couple times to see if it will really hold. So far, the ice is holding. If we get the full a-b-c-d-e of a HT as modeled below, it will be as if someone is dancing on the ice. If that holds then then next wave up has something solid to build upon.
In a perfect world we would see the 4th wave HT play out. A premature break above the top rail here says that the 4th wave HT model is bust and blue 5 is underway. Again, it might not seem like much but there are good percentages at play here. Note that 3s can quickly turn into Cs if the market so chooses so you have to stop out below that downsloping blue line. If buying now I'd put the stops at 10.80. If you don't buy now, this might just gap up into blue 5 tomorrow. But since it could also reasonable create the HT I won't be holding this overnight but rather looking to scoop some up tomorrow. Another reason for not wanting to hold is that the center of the recent wave looks suspiciously like my GOE (Galaxy On End) formation which suggests that this whole thing could be an a-b-c of some sort. So I think risk aversion outweighs greed this time.
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