Projecting the Bull Flag High of April 3

Apr 3, 2009: 5:01 PM CST

If you see a potential Bull Flag setting up, do you know how to project the Profit Target?  Let’s use Friday’s intraday action and the bull flag that set-up mid-day to learn how to find the price projection point of a Measured Move or Bull Flag.

I described earlier how to use the Fibonacci Price Projection tool in TradeStation (which is the same in other programs I’m sure) to Project a “Measured Move” off a Flag and I wanted to show today’s action as an example.  Please reference that article for a more detailed description.

To review, there are three parts to a Bull (or bear) Flag:

1.  The “Pole”  (which is the initial up-thrust)

2.  The “Flag” (which is the retracement against the impulse)

3.  The “Measured Move” (which is the portion you want to try to capture for profit)

Use your Fibonacci price projection tool to start with the Low of the Pole, draw (or click) to the High of the Pole, and then draw (or click) to where you suspect the Flag will find support.  The software then draws the respective Fibonacci projection for you – in this case, the 100% Price Projection.

Keep in mind that the Flag should find support at a Fibonacci Retracement of the Pole.  In this case, the flag found support at the 50.0% retracement (not shown).

Even if you miss profiting from a good piece of the Measured Move, you can identify expected resistance from the Price Projection – the dojis there gave you clues odds favored a return at least to the 20 EMA which was good for a scalp.

Corey Rosenbloom
Afraid to Trade.com

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5 Comments

5 Responses to “Projecting the Bull Flag High of April 3”

  1. gawed Says:

    hey corey could this also be considered a craddle trade? maybe one a bit late?

  2. Anonymous Says:

    hey corey- just reminding about my request from earlier this week (you said to remind you). i traded cbs for a good gain this week. now out of it. if you have time, could you chart cbs and offer any advice if think it is in a solid uptrend and if one should look to get in on pull backs.

    many thanks. john

  3. Dominick Says:

    Hello Corey. Having not studied Elliott very much(probably to my own detriment), could that 5 wave pattern starting from 10:00am have qualified under the rules? I tuned in later in the day with about an hour to go and was following XLF. I believed price may make that final push up(thinking correctly or not that price was in one of those five wave elliott patterns). I passed it up under the assumption price may take a nosedive due to it being a friday,it was the end of the day, and there may be some profit taking before the weekend. Your thoughts?
    Thanks for the great posts and lessons, your site has been a tremendous help.

  4. gawed Says:

    one other question, i’m assuming one enters a trade at the final push.. where would the stop should have been? if the stop had been at the low of the candle marking the low of the flag then one would have been stopped out six candles later and missed the uptrend… is it wrong to set the stop there or there’s another line of reason that would point to a stop lower than that?

  5. pikertrader Says:

    hey corey,
    with the bull flag, I see one formed and broke out on the 60min 60 day chart, looks like a price target of 869. Bull and bear flag are one of my favorite patterns. i posted the chart @ http://www.pikertrader.com. or here is the link to the chart http://1.bp.blogspot.com/_NuJL-LOblQo/SdgMWyw7R0I/AAAAAAAAAes/N65fYSIpRxI/s1600-h/60MINSPXBULLFLAG.png