Outcome for Breakout with Divergence

Last week I posted a setup for a breakout trade. However, I noted that there was divergence between the price action and momentum, which is a warning that the trade could fail. Did price hit the target? Yes, the choice for target price (solid green line)worked well, but price pulled back higher before making the move.



Below is a close-up of the breakout region. Notice that the breakout level (solid blue line) is penetrated, which would have triggered entry into the trade, followed by a exit at the stop loss level (solid red line). The challenge with trading is to perform flawless execution. It's not sufficient to enter place a trade in the right direction and anticipate the correct target price.