HOKU broke out of a base on high volume. After carving out a tweezer top reversal pattern, it retraced 32% of the move from the ORL to the swing high, on declining volume. It held its 5 period MA and setup a long entry on a base within a base.On the two charts below, I've highlighted PPs (blue lines) and gap resistance (red lines). 50 MA has been recaptured on a closing basis but 20 MA is just pennies away.
4 comments:
jamie,
help me understand the pp on the second 15min chart. the first blue line starting from the bottom, why did you choose 8.50 as the pivot and not 8.75 as it lines up with the swing high close to around 12:00 on 08/01/07? woudln't that also be a pp? thx
Andrew,
I chose $8.50 because it served as support on the open on 27/7 and resistance on the open 8/02. Your PP is also good and we can add $9.00 as well. Lots of PPs until we get back above gap resistance.
Jamie,
Did the 2 bars with long upper shadows pose a concern to you? Or not because even if they reverse at the top of the upper shadow, you would still have gotten some good Rs? I'm just guessing... Btw Where was your initial stop? Thx!
Anon,
Initial stop was around $8.55. That's right, since the entry is a base within a base, if the second level of the base fails, I still have time to save the trade.
The tweezer top is always a concern, but I really liked the low volume during the pullback and consolidation so I decided to take a chance.
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