Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 154

Southwest Airlines (LUV) made a broadening top going into 2001. Prices in the following notebook entries have not been adjusted for the 3:2 stock split. On 26 January, “I bought at the market on a broadening top, price is at [the] lower trendline, but moving up. The [company is] successfully hedging their fuel costs. I expect oil prices to decline, FED [Federal Reserve] to ease interest rates next week, and economy to slowly rebound.

“I actually think this will be a loser trade, but broadening top chapter in new book [this one] says it is a strong candidate to buy. I expect a partial rise with downside breakout. Upside is formation top at 35, downside is stop‐loss at 27.30, call it 27.25, for a 10% decline. If it closes below 28, that is sell signal. Dump immediately. Filled at 30.39.”

I didn't buy exactly at the bottom of the broadening bottom (28.20), so that's something I can improve on.

 Lesson: Try to buy as close to the optimum entry price as possible (the lower trendline in this case).

The stock continued to move higher, but halfway up the chart pattern, it stalled. That's common and wasn't a cause for concern until price started backtracking.

“12 February 2001. I sold at 31.18 because of a partial rise on the broadening top. Since I believe this is going down, there was no sense to wait for it to close below 28 before dumping. I made a small profit, about 2.5%.”

For a swing trade, I got in late and exited late, too, hurting the profit margin. Looking at the chart, the picture looks like a head‐and‐shoulders top. The partial rise is the right shoulder, and it's at the height of the left shoulder. I should have been prepared for the stock to turn lower there because of the mirror on the left side of the pattern.

 Lesson: As price moves, pay attention to the surrounding price landscape for clues to how the stock may behave. Look for support and resistance areas where the stock might reverse.

 Lesson: Play with price mirrors.

Price mirror: Pick a vertical turning point on the price chart and reflect the left side of the chart onto the empty, right side. The peaks and valleys on the right, in the future, might match the ones that happened in the past. It's better than sex when it works, and it gives you some idea of what the future could bring.

For example, if you were to flip the chart across the head of a head‐and‐shoulders top, you'd see that the right shoulder will match the distance and price of the left shoulder. You can continue the analysis for the rest of the chart, too, giving both price and time on the turns.