AAPL $177.00 was a clear pivot point base early in the session, but it took a long time for the pattern to set up correctly. Eventually, it became clear that we had a C&H base and break, but there was a lot of choppiness before the pattern was ripe for trading.
On the 1 minute chart, AAPL formed a base as price tested the 50 SMA. As price broke out of the base, it printed 3 WRBs on higher volume = flag pole. Then price consolidated sideways on declining volume = flag. Price broke out of the flag pattern on a huge volume spike. As soon as volume spikes above the line segment, it's time to get in. On a measured move basis, the flag pattern should produce two flag poles, one before the flag, and one above the flag.I took a partial after 3 consecutive WRBs on the 15 min. time frame. After that allow for a 38% retracement. On a measured move basis, the C&H pattern also generates a 100% extension, but time ran out on this one.
What's my favorite number? The number 3 figures prominently in my trading.
5 comments:
Jamie,
Nice breakdown on the 1-min chart.
It will be interesting to see bear flags that form on the dailies if the market rallies over the next couple/few days.
Thanks Jim,
No lack of flag poles in the commodities/energy sectors. I get the feeling that any rally at this point could be short-lived and that many of the weaker names have reached a short-term bottom. Crude inventories tomorrow should be interesting.
Jamie,
After you partial, where did you adjust your stop? The 3.15pm hammer would have probably shook me off.
YR
YR,
I used a mental stop on AAPL. Basically, I allowed for a 38% retracement from the bottom of the flag to the highs up to that point. If I use a hard stop, I get stopped out usually by a few pennies. So now I look at the price sticks and volume to give me a clue whether or not this is a retracement or a reversal. Read my chart notes on the CTSH trade today as I played it the same way.
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