Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 28

Figure 1.4 shows the same pattern in the advertising industry (which is suspicious because it's the same industry as Figure 1.1) but a different period (2018). The large breakaway gap up in early November (A) was because of third quarter results, which the market liked (hence the bullish gap). After that, price moved horizontally at B and made a strong push lower to C, followed by a headline‐fetching rise up to G.

Along the way, earnings came out and helped momentum push the stock up (D and E). Near the top, earnings at F sent the stock lower, but only for a day. Perhaps the weak quarter was a warning of a coming trend change. At H, the market disliked earnings and seemed to confirm an end to the upward move, at least for a time.

I visited the company's website and found a headline for I (near the diving board), titled, “UBS Global Media and Communications Conference” webcast. I didn't listen to the broadcast, but the stock turned sharply lower a few days later, making a straight‐line run down to C. I don't know if the webcast was the cause of the decline or what happened to send the stock skittering to C. If you owned this stock at the time, it would have been wonderful if you knew the cause of the drop (from I to C).

Figure 1.4 This diving board is on the daily chart.

This chart, on the daily scale, is similar to Figures 1.1 and 1.2. You can use these historical charts to formulate how to trade the pattern. If you can time your entry near C, then you can ride price back up to the base of the diving board (B).

You can wait for price to close above the highest peak at B and ride price upward to G. Below the bottom of the diving board (B) provides a good stop location, too.

The ride upward to G may not be as smooth as shown on this chart or in Figure 1.2 as price climbs from C to D. It might be as treacherous as the climb to D in Figure 1.1. When I look at this chart, though, I see dollar signs in the form of profit. All you have to do is find this pattern and have the courage to trade it.