The market has a chance to run here with the Dow Jones trading above 10,500, but with light volume this week, nothing is certain.
Apple Inc. [[AAPL]] is breaking out here, hitting an All-time high today:
International Business Machines Corp. [[IBM]] looks great here above $130:
Triangle patterns are one of my favorite patterns to trade. If you caught JA Solar Holdings Co., Ltd. (ADR) [[JASO]] or [[GSI]] over the past few weeks then you understand why I love to trade the pattern.
Typically, when a stock breaks the apex, you get an initial powerful move (This is what I live for– The BTFOs). Next comes consolidation, then comes 2nd BTFO, more consolidation, more BTFOs, and finally a move to the upper range of the channel.
Let take a look at JA Solar Holdings Co., Ltd. (ADR) [[JASO]]
Notice the breakout from $4 – $5, consolidation after, then 2nd breakout above $5, ect. This pattern is oh so familiar, and many breakouts will take place for daytraders to bank before the final target is reached at the upper range of the channel– target for swing traders.
As a rule of thumb, to find your target price, simply calculate the high and low of the triangle (in JASO’s case it would be $6.25 – $3.75 = $2.50). For swing trades, this give us a possible profit of $2.50/share if you can catch the initial breakout. Now, nothing is guaranteed in this game, but I’ve witnessed this same kind of move countless times over my trading career.
Let’s take a look at another example, [[GSI]] . Now if you are an impatient trader, such as myself, you might play the stock serveral times allowing you to catch the each breakout, while sitting out the consolidation period.
I’ve played this stock several times since the break of the apex, and I want you to notice the powerful moves on each break. These are the moves I look for each and every day, and are pretty consistant relative to pattern. Note: I caught today’s move (noted inside The PPT).
Whether you are a swing trader or daytrader, triangle patterns are a trader’s best friend and should be cherished. And, if you happen to find one, be sure to share them on the blog, as I will do the same.
Here are two triangle patterns that are in the beggining stages of a BTFO (disclaimer: I am long both):
E TRADE Financial Corporation [[ETFC]]
Dynamic Materials Corporation [[BOOM]] :
[[URE]] I like it above $7.00:
Sears Holdings Corporation [[SHLD]] is about to BTFO:
Micron Technology, Inc. [[MU]] I like it here with a stop below $9.14 (former resistance):
Flextronics International Ltd. [[FLEX]] Watch for a breakout:
AK Steel Holding Corporation [[AKS]] I like it as right here above $21.69
for new entries.
Here is a rough draft of the contest, everyone please check you pick. If I missed anybody, or anything, please let me know. (That was a lot of data to enter)
Congrats to MarketMonk (+450%), ZMoose (+200%), & DBears (+200%) for huge winners in 2009, great jobs guys! (I still have a reserved spot you)
Comments »Let the games begin! Here are the rules: Your stock must be over $5, no duplicate picks, & the starting price will reflect closing price on Dec 31st. Limit 100 contestants
PPT members got of to an early start, here are their picks (please check the list, no duplicate picks)
Place your stock of the year in the comment section.
Comments »[youtube:http://www.youtube.com/watch?v=tVoqA-LKGb4]
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