Joe,
Terrific analysis! I was able to follow and understand all your points - all excellent btw.
Firstly, I track EVERY SINGLE trade I do, how far it moves, drawdown, etc. so I can construct a statistical model of the setup or trigger for future use in determining stop placement and profit targets. This enables me to then have a Profit Expectancy (PE) figure for my trades. (I used to call this procedure callibration, but one of my gang corrected me and told me it was called Profit Expectancy - Thx Dan) This one particular setup runs 92% probability of winning with a PE of approx. 68 cents for each dollar risked based on the selected stop and target. Thats where that 92% stuff comes from. Enough math.
You actually nailed the reason i'm doing this trade, and yes, it is S/R based, but more importantly, it fits perfectly into the model, the S/R line provides a nice low risk entry. As for the targets, they are mathematically derived, gaps have nothing to do with it, that was just coincidence. They are there only to catch a winfall profit should something happen, I constantly adjust the target and the stop to changes in volatility and current market conditions. Remember these little tid bits... Its always darkest before the dawn, The high of a chart is when its most bullish, and the low of the chart is when its most bearish, and of course, buy low sell high.
RobT