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Strategies & Market Trends : Wedges, triangles, and stuff: Chart patterns for breakouts
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To: shasta23 who wrote (243)9/25/1997 3:16:00 AM
From: HeyRainier   of 257
 
Stefan, vague as it is, your memory is pretty sharp. According to Edwards and Magee of "Technical Analysis of Stock Trends," you measure the distance from the point of the previous breakout, then measure the same distance from the point where prices break out again(and in the same direction). This level is the minimum expectation. To be conservative, I'm picking the distance from 11 to 14, and hence from 14 to 17 as the target.

Quoting: "...As a matter of fact, advances from Flags of Pennants in an uptrend generally go farther(in terms of points or dollars) than the preceding move, while declines may not carry quite so far.."

It appears that the reward/risk ratio is in favor of the long position, and may result in the above target being potentially short of its full move.

Regards,

Rainier
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