Trade Set-Ups

Financial giant Goldman Sachs (GS) recently posted two major classic patterns on its daily chart worth an educational mention: First, notice the lengthy declining triangle formation (pattern) both in the actual price and the narrowing momentum oscillator. Price ejected down from the horizontal support line (base) and formed a retest at the throw-back point, which…

Here is a quick example of a bear flag that has resolved nicely on the 5-minute intraday chart of the DIA (Dow Jones ETF): This bear flag was classic in that it retraced into key resistance from the 20 and 50 period MAs. The “lightning bolt down” or measured move terminated at virtually the exact…

Seriously, I was surprised at the rampant volatility in the market today, with large upswings and downswings, a gap impulse that was faded, and a very weak close. All you can do is learn from it and that’s exactly what I intend to do – I am posting what I considered “idealized trades” according to…

Goldman Sachs (GS) recently formed a consolidation coil or triangle, and recently set up a classic “throw-back” or second chance high probability entry. Notice the absolutely clear triangle consolidation from November until early January, and the subsequent break in mid-December. I posted previously about the triangle break as a potential opportunity to trade GS short…

I love it when trades work out as close to perfect as possible. Apple Inc (AAPL) exhibited a classic 1,2,3 Gap Fade play this morning that allowed for major profits for aggressive traders: The 1,2,3 Gap Play is as follows: 1. First trade with a gap is to FADE the gap and play for yesterday’s…

I always love divergence patterns and their resolution in the market. A full-day divergence on the 5-minute chart from Friday is being resolved today, with the birth of a new intraday uptrend on the 5-minute chart. The market simply cannot make up its mind. Extended Divergences are patterns where you can almost feel the surrender…

Although the next chart may seem garbled, it is actually detailing recent simple bull and bear retracement patterns on the 15-minute chart. This serves as a great educational example: I also call bull and bear flags “lightning bolts,” though technically I should only call bear flags lightning bolt patterns because of the equivalent downwards thrusts….

Apple (AAPL) recently completed an ideal momentum divergence which has resolved to the downside. Imagine momentum divergences as you would a coiled spring that is building up pressure. To release the pressure, the spring must resolve to a neutral position, but it doesn’t always have to do so all at once. Apple recently showed us…

Google has been a leading stock in 2007, and traders expect it to continue to outperform. A classic pattern in technical analysis is forming which we can monitor for resolution, or potentially trade for profit. Google is forming a triangle consolidation, out of which price can be expected to trend for a sustained period following…

Here is an interesting study on the intraday price action in the DIA (Dow Jones ETF) for December 28, 2007, which includes the most perfect “Gap Fade” Play I’ve ever seen. Gap Fade play: This example of a gap fade is one of the most perfect examples in that the gap was clear, was less…