Classic Geometric Patterns and Narrow Range Setups
- Thread starter inandlong
- Start date
so... how did you do?
inandlong...?
Hey Electric, I don't know how I missed your posts about AEOS. I apologize for what must look like a blowoff. I had to go back to my trade statements and find out. I made .23 on 3000 shares on that trade. Perhaps stupidly, I feel obligated to trade a stock when I post it, kind of putting my money where my mouth is. I was looking short so I didn't take that first move up right after I posted.
FWIW, I had shorted the 35 calls when the price hit 35 and retraced below the previous high a couple of months earlier, so I made a little bit on that too. The real move I was looking for occurred over the last 7-8 trading days. But I'm on vacation.... and still hangin' out with you guys.
Anyway, again, I apologize for overlooking your question.
FWIW, I had shorted the 35 calls when the price hit 35 and retraced below the previous high a couple of months earlier, so I made a little bit on that too. The real move I was looking for occurred over the last 7-8 trading days. But I'm on vacation.... and still hangin' out with you guys.
Anyway, again, I apologize for overlooking your question.
no prob...glad u made it on that trade...
Quote from inandlong:
Hey Electric, I don't know how I missed your posts about AEOS. I apologize for what must look like a blowoff. I had to go back to my trade statements and find out. I made .23 on 3000 shares on that trade. Perhaps stupidly, I feel obligated to trade a stock when I post it, kind of putting my money where my mouth is. I was looking short so I didn't take that first move up right after I posted.
FWIW, I had shorted the 35 calls when the price hit 35 and retraced below the previous high a couple of months earlier, so I made a little bit on that too. The real move I was looking for occurred over the last 7-8 trading days. But I'm on vacation.... and still hangin' out with you guys.
Anyway, again, I apologize for overlooking your question.
JCP daily chart:
This pattern is about 17 days long, so the classic break would occur somewhere b/t days 8-13. Today is day 7.
Be sure to look at volume on a pattern break. Classically volume should surge substantially. Volume on pullback days following a break should be markedly less. A break without a volume surge suggests pattern failure, but only in the sense that wedges and pennants are usually continuation patterns, thus pattern "failure" simply suggests that a trend change might be occurring.
YHOO is a recent case of pattern failure followed by trend reversal. Look back at the chart posted several days ago. The break occurred during the classic period, but was not accompanied by a surge in volume. This was a clue that the breakout was false. Ultimately the lower boundary of the pattern was taken out and acted as resistance for the next two days. Then came earnings! Nice earnings, but a delay in new software release and whoomp!!!
Volume is an important clue in consolidation pattern breaks.
This pattern is about 17 days long, so the classic break would occur somewhere b/t days 8-13. Today is day 7.
Be sure to look at volume on a pattern break. Classically volume should surge substantially. Volume on pullback days following a break should be markedly less. A break without a volume surge suggests pattern failure, but only in the sense that wedges and pennants are usually continuation patterns, thus pattern "failure" simply suggests that a trend change might be occurring.
YHOO is a recent case of pattern failure followed by trend reversal. Look back at the chart posted several days ago. The break occurred during the classic period, but was not accompanied by a surge in volume. This was a clue that the breakout was false. Ultimately the lower boundary of the pattern was taken out and acted as resistance for the next two days. Then came earnings! Nice earnings, but a delay in new software release and whoomp!!!
Volume is an important clue in consolidation pattern breaks.
Let's see what happens here with this JCP chart. The daily data is skewed because of a misprint that QCharts might or might not correct. Of course this affects all indicators that use the HOD as a variable. Regardless, for our purposes the lower boundary of the pattern was penetrated; however, the break occurred on lower than average volume which is not what we would like to see "classically" from a continuation pattern.
Aside: it is remarkable - therefore I remark - how many times I have seen a "misprint" occur at the boundary imposed by a pattern, trendline, or moving average. While I won't go as far as to imply "manipulation", these incidents seem to occur too frequently to be happenstance. Just my opinion.
Aside: it is remarkable - therefore I remark - how many times I have seen a "misprint" occur at the boundary imposed by a pattern, trendline, or moving average. While I won't go as far as to imply "manipulation", these incidents seem to occur too frequently to be happenstance. Just my opinion.