The breakout alludes to a possible new directional move, which in this scenario is anticipated as downwards on Tiger Brands.
The retest of the breakout area provides a second opportunity to trade the breakout. It also provides an improved risk/reward ratio when using the midpoint of the range to gauge a stop-loss level.
A target is projected from the breakout area proportionate to the height of the range.
|Initial target (initial Breakout low)||29700c|
| Ultimate target (height of range projected)
| Failure level (midpoint of range)
| Stop-loss distance
||450c (current price – failure level)|
|Initial reward||1000c (initial target – current price)|
|Ultimate reward||1400c (ultimate target – current price)|
| Initial Risk/Reward ratio
| Ultimate Risk/Reward ratio