This is a quite nice and orderly mini h-patter. The leg of the h is quite vertical (more vertical than in my ACI trade yesterday), which I interpret as sellers having quite a bit of thrust. And the arch part of the h prints a nicely rounded arch. I would had liked to see more upper shadows in the right side of the arch, but the 3 bars previous to the break of the base (marked with a thick black line) show that buyers do not have a lot of power at that point.
Other factors that reinforced my conviction were: 1) price struggles to close above the low of the previous day (although a few bars managed to do that) and 2) price is unable to close above the downsloping 20EMA.
In my chart, I highlighted the mini-h patter in light blue, but unfortunately the h covered the 20EMA. I will try to improve that in future charts.
8 comments:
Hi anarco,
What is your stop for WB?
Thanks.
TL
Hey Arnarco,
Very nice! Do you want the price level/points that comprise the base of the h outside of the previous day's range?
TL~
16.02 was my stop.
Cheers,
anarco
Thanks Jim!
I am just starting to observe these patterns so I do not have a lot of experience with them. What I already know is that the pattern seems to be stronger if the top of the arched part of the pattern hits some form of resistance (previous day low, daily PP, S1, S2, etc.)
If you have any observations, please feel free to post; it is nice to learn from each other.
Cheers,
anarco: I've observed this pattern before but you've really described it well. Thank you. Question regarding your entry... did you buy on a break of the bar low that breaks and closes below the base or did you just buy once the base is broken.
Also, what watchlist are you using to catch these?
Thanks 00nr7!
Entry: Once the h took shape and before the breakdown, I placed my stop sell order 0.01 below the base line. I think that is a bit more aggressive than waiting until a candle closes below the line, but I'll keep experimenting with this.
WL: I have my basic WL with about 15 stocks, but WB is not in that list. However, I am using eSignal and I also have defined additional windows (the called them quote windows) with a handful of stocks per sector. I currently monitor a few stocks in the financial sector (WB, GS, LEH, BAC, MER). I also monitor a few stocks in the oil sector, and metals, etc. So depending on what is going on in the market, I browse through those quote windows throughout the session. So with all the LEH debacle these day, I check my financial window as I do my regular WL. I hope this makes sense. It is for me like have a primary WL and a secondary WL, and on top of that I have (of course) the gap window with the stocks that gapped at the beginning of the session.
anarco... everything ok? No post in while which is unusual.
Hey oonr7!
I appreciate you note.
Everything is fine with me. I have been swamped at work (due to Oracle Open World). And I have been watching this crazy market from the sidelines. Today, I placed my first trade in almost 10 days (I'll post it later).
It is an interesting experience, to step back and observe market action without getting involved.
Anyway, I read your blog and Jamie's every day.
Cheers,
Alejandro
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