ET has become so over-run with garbage threads I hardly look anymore. Which is why I missed this excellent thread until just today. Thank you inandlong for starting a real thread. Thanks to the others who have kept it alive. I'll try to contribute. Trade well.
Uptik'!!!! Yeah man, welcome aboard. Your first contribution is fantastic. It perfectly illustrates the scenario I was trying to describe to hombre. In this case BRO has formed a very nice looking pennant, while also qualifying as a NRID7... 9 actually. I'd call this a pennant because it is fairly short in duration, versus a symmetrical triangle. Classically, this pattern has decreasing volume throughout but BRO doesn't exhibit that until the last three days. The fact that there was gigantic volume that didn't push the price to a higher local high is interesting.... possibly foretelling a pattern failure breakdown instead of the classic break out that the pennant implies following a bullish move. These patterns are also great for making price targets using the "measured move" concept. I have seen the measured move come to fruition many times... but it still amazes me. Perhaps it's self-fulfilling... I don't care. The base of the triangle is 3.20 wide. From the level the price breaks out of the pattern we should add 3.80 to it and that is the price target. Given tomorrow's level of ~44.60 - we should be thinking ~48.40 as a target. Regardless of which way it goes, we are prepared for a consolidation break because of uptik'. Thanks uptik' and good luck this week.
TASR gapped down this morning - so the setup was negated for me. I move on to easier things. However, I do watch these even if they are negated. In the case of TASR, I watch for two things: 1.) The price to move back up through the NRID, and break to the other side. Again, a high probability / low-risk setup if it happens. 2.) A move back up to what is now resistance. In TASR's case, it can be the 20SMA or the bottom of the NRID. If your are drawing triangles (trendlines), it would be the bottom that in the past was providing support. If it reaches that level and stalls out, it is a good low-risk entry. Have a good trading week.
A rose by any other name..... A couple of the distinctions that Edwards and Magee make between the two formations regard time and the character of the preceding move. A more dramatic move and a shorter time period in the pattern tends to get the name "pennant." However, both symmetrical triangles and pennants are statistically continuation patterns. So it doesn't really matter what the pattern is called. What does matter is that an opportunity to enter at the beginning of a move has been identified.