| Technical Analysis Corrective Triple Three Zigzags |
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| Tuesday, January 30, 2007 |
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Morning Update - Fast Moving Parabolic Up Patterns that end Macro Corrections & Corrective Waves - APA Chart Pattern
Good Morning. To my surprise, I just recognized that another bullish pattern is occurring in the Oil stock APA. Now, I know that we have already entered the position. It is important that you know that this doesn't alter my bullish stance on APA one bit. It makes the case for APA even more bullish. I just regret not having seen this pattern earlier, so that I would have gotten a lot more aggressive on this sector and this stock. I knew that APA was in a corrective pattern, but I did not realize until after the breakout, exactly to what extent the pattern has been in an extended lateral correction. Today, I will discuss this revised pattern and what the implications are for APA. This pattern is known as a triple triangle pattern. This is a really great pattern that has the potential for fast and parabolic "sudden profits." Trending123 played this pattern back in October of 2005, when the NASDAQ was in this pattern. Portfolio stocks that are in a triple combination pattern are: APA, EOG, & SU. Please study the Elliott wave diagrams below.
What is The Triple Triangle Pattern / Triple Combination Play
WXY Waves - 3 waves containing a flat, zig zag, symmetrical triangle or zig zag. A triple triangle pattern often seems to appear out of nowhere on a chart. This pattern always contains W,X,Y waves and it always has 3 waves. Hence the name. Furthermore, this pattern must contain all of these: a flat, a zig zag, and a contracting symmetrical triangle or a zig zag at the end of the consolidation move. For example, the first part of the move will contain an ABC, flat move, down to put in the larger wave W. The second part of the move, will be a counter trend, ABC zig zag, move up in order to put in the larger wave X. Then, the third part of the of the move, will contain either an ABC zig zag move down, or a contracting symmetrical triangle that marks wave Y.
Time Factor - 12 months to 24 months
In addition to the 3 waves W, X, and Y being present, time is also a vital component of this pattern. It is important to recognize and remember this factor. A triple triangle pattern is a consistently slow moving pattern, and can take 12 to 24 months to develop. It is a macro correction. The pattern typically takes a year and half to two years to form because it is an extended lateral sideways correction move. This pattern typically forms in an uptrend . Furthermore, upon breakout, the triple combination pattern signals a bullish continuation move upwards.
When to Play this pattern: After the Y wave has completed.
The optimal time to enter this pattern is when wave E has been placed within the continuing symmetrical triangle that occurs in the larger wave Y. This signals that wave Y has been put in. It is also when the equity or index is poised for a breakout of the symmetrical triangle and a fast parabolic breakout move ensues.
DO NOT CONFUSE THIS PATTERN WITH A CONTINUING SYMMETRCAL TRIANGLE.
PLEASE STUDY JOHN LANSING'S VERY DETAILED AND ANNOTATED CHARTS OF APA BELOW.
Apache Corp. - (APA) - Energy Sector - Daily Chart Triple Triangle Pattern- Optionable
APA is a medium risk Oil play. The daily chart illustrates that APA has spent the last 20 months in a Triple Triangle Pattern. It has been in a WXY lateral consolidation move. You can see that the Y wave has been completed with a bullish symmetrical triangle. The optimal time to have entered this stock would have been at wave E when APA hit the bottom of the symmetrical triangle and the price was $62.87 at the beginning of the year. When I issued the original buy alert at the end of November at $66.50 I did not realize that APA was in this pattern. Now that the breakout has occurred the pattern is clear. Nevertheless, we have a APA at a good price. If you look at the moving averages, you can see that they too have coiled and consolidated in a sideways fashion within the WXY waves. Now if you look at the moving averages in the Symmetrical, you can see that they are coiling along with the price moves. Then, at wave E, at $62.87 you can see increasing volume come in, and this pushes the price up and causes a bullish triple moving average crossover. At the same time, the Aroon has a 123 bullish cross and the indicators and oscillators bottom and immediately reverse upwards in bullish V shaped manner. Furthermore, you can also see that the RSI and PPO begin to show bullish divergence and coil during the final symmetrical triangle formation of wave Y. Since this pattern is so bullish and now that the breakout has occurred I am going to revise the price target on APA. As you can see it is already trading close to my original price target of $72.00. I believe further gains of $10.00 to $15.00 are possible for APA if it is held as an investment. Please wait for my revised number to show up in the Portfolio.
Edited by Daisy
Andrea Victoria Friend aka Daisy
Editorial Assistant for Trending123.com
daisy@trending123.com
COMBINATIONS (DOUBLE AND TRIPLE THREES)
Elliott called sideways combinations of corrective patterns “double threes" and “triple threes." While a single three is any zigzag or flat, a triangle is an allowable final component of such combinations and in this context is called a "three." A double or triple three, then, is a combination of simpler types of corrections, including the various types of zigzags, flats and triangles. Their occurrence appears to be the flat correction's way of extending sideways action. As with double and triple zigzags, each simple corrective pattern is labeled W, Y and Z. The reactionary waves, labeled X, can take the shape of any corrective pattern but are most commonly zigzags. Figures 20 and 21 show two examples of double threes.
Figure 20
Figure 21
For the most part, double threes and triple threes are horizontal in character. One reason for this trait is that there is never more than one zigzag in a combination. Neither is there more than one triangle. Recall that triangles occurring alone precede the final movement of a larger trend. Combinations appear to recognize this character and sport triangles only as the final wave in a double or triple three. All the patterns illustrated here take the same form whether within a larger rising or falling trend. In a falling trend, they are simply inverted.
APA
APA
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