| Stock Chart Patterns Measure Distance One |
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| Sunday, January 7, 2007 |
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Sunday, January 7th 2007
Weekend Update - Chart Patterns Measure Distance Part 1- TS Chart
Good Afternoon. In this update I want to discuss how Chart Patterns Measure Distance and use the TS chart as an example. A good way to illustrate this is by showing you the before and after charts of TS. That way, you can see how a chart pattern plays out and how a pattern measures distance. By the way, at the end of this update you can click on any of the charts on this page and it will take you to the original update.
On October 13th 2006, I issued a buy alert for the stocks TS and ANDE. In the original update, I pointed out what geometrical shape /pattern each stock was in, how long the pattern would take to play out, and which stock was ready for a fast move up to price target in the shortest amount of time. That stock was TS. It was in a symmetrical triangle pattern. Patterns, which are geometrical shapes, measure distance. Shortly after we bought TS, it meandered sideways, then it started moving up, and then it started gapping up and gapping up. At this point, some subscribers were anxious about holding on to the gains that they had. Consequently, I issued an alert to take some profits on TS, even though it was still moving up in wave 5 and had some more gains ahead of it. Nevertheless, there were some subscribers willing to wait until the price target was reached, which was in the $50's. Now if you look at the second TS chart, you can see that it did indeed have a parabolic rise up into the 50's. TS moved exactly as the chart pattern dictated. In reality, the amount of traders having the ability to hold the stock all the way to the pre-determined price target is few and far between. This is because unrealized gains make traders anxious which causes them to take profits too soon. Therefore, they lose out. It is for this reason, that I will no longer micro manage portfolio stocks.
Where did I get the TS trade from? I got it from the stock pattern scan. The pattern scan alerted me on October 13th that it was in a bullish symmetrical triangle pattern. TS was trading at $35.00 when the alert was issued. The symmetrical triangle pattern determined that the target price for TS was going to be between $50.00 and $53.00, and that it would take at least 124 trading days to reach that price. In the end, TS took less than half the amount of time to reach price target, because of the wave structure that it was in. Wave structure determines the speed of a stock's move. If you look at the 4th chart of TS, you can see that it made new highs in the 50's, but bearish divergence shows up in the MACD which alerts you to the fact that it has topped. For those that stayed in TS for the full run, you know that target has been hit.
Patterns / Geometrical Shapes measure the distance or vortex, which is the actual width of whatever geometrical shape a stock happens to be in. This is how you come up with a price target for an equity. The wave structure that a stock is in, tells you how fast the stock will move to price target. Consequently, reading chart patterns has a lot to with time, price and wave structure.
In this update I wanted to give you a before and after picture of how a chart pattern does exactly what it is supposed to do. I also wanted to emphasize that no matter when you take profits, a chart pattern and it's wave structure determines the ultimate price objective of a stock's move. Therefore, I will no longer be micro managing our stocks in the portfolio table, like I did with TS. I will wait until final price target is reached. Ultimately, everyone makes their own choice as to what they are going to do with a stock. In the case of TS, the pattern was identified, the trend was identified, the target was identified and I showed you how it played out.
Edited by Daisy
Andrea Victoria Friend aka Daisy
Editorial Assistant for Trending123.com
daisy@trending123.com
Chart Patterns Measure Distance
TS BEFORE
TS AFTER
TS PATTERN SCAN UPDATE BEFORE
TS PATTERN SCAN UPDATE AFTER
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