Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 126

Palmer sat at his computer desk. His foot hammered the carpet, and his fingers drummed the desk. It looked as if he swallowed too much caffeine. I am sure you have met the type.

Faced with the situation shown in Figure 9.5, he took swift, decisive, maybe even impulsive action. At point A, where the stock touched the top trendline, he quickly sold it short and received a fill at 33.38. He placed a stop at 34 in case the trade went against him. Then he waited.

It did not take long for the stock to cross the broadening top and reach the horizontal trendline.

Figure 9.5 Shown are price targets using half and full formation heights for the broadening top formation.

His fingers stopped moving, and he pointed at the screen. “I should have placed an order to cover my short at 29.38. That's the value of the bottom trendline. Look what happened.”

Price bounced off the low. He covered his short the following day, shown as point B, at 30.50. Immediately, he went long and bought the stock at the same price.

Palmer placed a stop‐loss order just below the horizontal trendline, at 29.25, just in case. Then he extended the top trendline. “I worried that the stock might not reach it, so I put a target below the old high at A.”

In less than a week, the stock reached his target and sold at 33.50 (point C). Since the stock was still showing an upward bias, he held off trading and waited for the trend to reverse. Three days later he sold the stock short again at 33. This time, he put a sell order above the lower trendline at 29.50.

“The stock moved against me. Made me nervous.”

I wondered what that would look like. He was already twitchy. He couldn't sit still.

The stock rose to 34 and oscillated up and down for nearly 3 weeks, never quite reaching his stop‐loss point of 34.38. Then the stock plunged and zipped across the chart pattern. It hit his target price at point D, and he covered his short.

Sensing a shift in the investment winds, he went long on the stock at the same price but put a stop‐loss order below the lower trendline. “The following day, I was stopped out at 29.25 and took a small loss.”

“Then what did you do?” I asked.

He reached for his coffee mug, found it empty, and left the office for a refill. I never did get an answer to my question.