| Technical Analysis Expanding Bottom Short Term Trades |
|
| Monday, January 15, 2007 |
|
Megaphone Bottom Classic Pattern - BAP Chart
On this update I will discuss and focus on the Megaphone Bottom Pattern. This Bullish pattern is illustrated in the one chart discussed below. "A Megaphone Bottom also known as a Broadening Bottom is considered a bullish signal, indicating that the current downtrend may reverse to form a new uptrend. This rare formation can be recognized by the successively higher highs and lower lows, which form after a downward move. Usually, two higher highs between three lower lows form the pattern, which is completed when prices break above the second higher high and do not fall below it." Please note that this is a much more difficult pattern to trade than a rectangle, that is why I am only using one chart to illustrate how this pattern works, and also because it is the only one that I could find.
Please click on the trading journal link provided for you below, in order to print out your trading journal. This way, you can update your trading journal as you read and listen to this update. Using this is a great way to learn how to trade with a trading journal! This is the first step that you need to follow on your path to achieving "sudden profits." This is what is called doing your homework or due diligence on an equity before you enter a trade. You can also use this sheet in the live trading chat room and when you receive a buy alert from John. Remember that a good trader always plans their trades and so should you, because a failure to plan is a plan for failure!
http://www.trending123.com/short-term-trades/trading_journal.htm
Credicorp Ltd. (BAP) - Daily Chart in a Megaphone Bottom Classic Pattern - Banking Sector - Not Optionable.
The daily chart of BAP illustrates that it has been trading in a broadening type of bottom pattern. The most significant aspect of this chart is the bullish divergence that is presenting itself in the price, the PPO and RSI. BAP is not a heavily shorted stock. It has short ratio of 0.4. A word of caution is due here. If you look at the chart you can see that BAP is trading below it's down trend line and there is overhead supply. There is also some bearish divergence. Consequently this trade is more difficult than the trades mentioned thus far this weekend.
Please look at the definition of Divergence at the bottom of the page.
Edited by Daisy
Andrea Victoria Friend aka Daisy
Editorial Assistant for Trending123.com
daisy@trending123.com
| Megaphone Bottom Classic Pattern |
| |
|
Implication
A Megaphone Bottom also known as a Broadening Bottom is considered a bullish signal, indicating that the current downtrend may reverse to form a new uptrend.
top
Description
This rare formation can be recognized by the successively higher highs and lower lows, which form after a downward move. Usually, two higher highs between three lower lows form the pattern, which is completed when prices break above the second higher high and do not fall below it.
The pattern is completed when, usually on the third upswing within the pattern, prices break above the prior high but fail to fall below this level again.
PIVOT, SUPPORT, RESISTANCE
BAP--DOES NOT TRADE OPTIONS
|
|
