Haven't I seen this movie before? dgabriel: Bravo. Post it your way. If you can keep from crude comments about certain other posters though, that would be appreciated. grob109: certainly make commentary too about the posts, but could you keep yourself from overrunning the intent of the originator of this thread so that this thread doesn't turn into a repeat of a few other threads you've been involved in? Thanks to you both.
Here is one stock I have been watching for some time now, prx, which is in the generic drug sector. It is painting a classical bullish ascending triangle, rising against diminishing volume. Excuse the badly drawn lines, but you get the point. THe stock has consolidated for nearly 6 weeks at this upper level. My buy trigger is 74 on good volume. I would give it about 1 point stop, depending on the buy fill. If it opens over 74, I play by ear and make a decision, see if it holds the breakout or not. THis stock made a gap up, and has held it, consolidated, and is creeping toward a breakout The idea behind the ascending triangle is buyers slowly move thier buy levels up as they compete with each other to accumulate, and remaining sellers get taken out in a bullish dynamic that clears out the path of resistance and sets the stage for the breakout. Given a bullish backdrop in the market, this pattern has a good chance of success. One caveat is the underperforming drug sector.
Further to the prior post by Grob, I have 12 years experience trading and investing in stocks, more years in other asset classes, am a college graduate, run a successful business, and have earned anually in the top 2% or better for the last 15 years.
RichTrader, I have scans that use RS EPS change, revenue growth, parameters to get a basket of stocks for long candidates. I have a scans that are designed to reveal stocks before they might break out of a base. I also scroll through 25 different sector groups and eyeball a lot. I am looking for certain patterns like the PRX. Earlier this week I had several candidates - some of which I traded.
You may have something here. Asc tris weren't working well before this run, but their time may be here again. I wouldn't worry too much about the volume on the 6th. Check an intraday chart if you can to see where the volume came in. I suspect that most of it came in the morning and that the rest of the day was spent recovering lost ground. The activity in the following days means more than the volume on one particular day. As for the volume last Thursday, that was to the upside. If the breakout is faded, are you planning on buying the test?
The triangle is reasonable healthy, and its recent action is stable. If it opens well above, I don't buy but wait, if it travels through 74 on light volume, I wait and assess, if it goes strong, I buy. If it breaks out and I buy and it is faded hard, I get out. I only want it if it goes, and if it does and it gets to 75 for example, my stop is breakeven. The volume on the selloffs don't bother me. A look back (which aa certain someone did not do) shows high volume one-two day selloffs after breakouts, but the stoock always consolidated and advanced. The volume and price action here is certainly not akin to a climax run. I can only look back at facts and make a educated guess going forward and see if certain parameters are met. This is not my ideal setup, but just something to get the ball rolling here.
Just to clarify. I set the trend lines using a weekly spread over two screens. Climax runs break out on the high side of such lines as shown on the snap shot. This stock happened to be a classic. You see breakouts and I see failure to breakout with high volume sell offs. This is what makes trading so exciting. I go for flawless stuff and to see a stock fail to breakout four times in a row after a 15% breakout on the high side of a long trm channel(A climaxing definition) is a place that few people want to be who think as I do. Phoenix is drawing you out on the fade also. Perhaps he sees something worth looking at. You provide us all with your reasons for tight trailing stops. And the frequency with which you must be updating them. PLX certainly does not have a cascading stop problem, but it looks like a lot of people have really taken hits when they bought at the top of the Flat Top Pennants. A lot of those sell offs occurred in the normal range that percentage stop setters use. I hope you pass on this one. It traded at 74 and backed off after 5 minutes of trading in that space during the midday. I don't think you are rushing to post in your journal; it's your choice. Go slow is a good idea for this stock. I don't think a short to fade it is very hot either because it is prbably going to do an inverted saucer like fade out. Four shots at 74 is a lot of bouncing off resistance. You see them all as breakouts I know; it seems the spread between where they start and 74 is used up as you say. But it is the hight side of any wwing that can be charted. It is not going to be a swing tade unless it fades. If I were a swing trader I would think that it is ready to traverse down to Support from the Resistance the chart is showing. I am not posting the weekly I used; it is showing in the snap shot. Maybe phoenix will suggest more to you on the fade possibility he brought up.