Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: philipsmc175 who wrote (373)	10/7/2000 1:14:58 AM
From: Teresa Lo	Read Replies (2) \| Respond to of 8925

QCOM Set up:"...curious about the entry decision on QCOM...Would the entry set up today meet your conditions for a long swing trade..." There were two ways to enter the QCOM trade. First of all the setup was seen on the daily chart. Therefore we know that if we are going to use this setup, the trade would be for a number of days, and we will take all price signals off this time frame. First, we had seen the consolidation going on all summer. No problem there. Next, it moved above the range on a pop. Then it pulled back to test for support, on the topside of the triangle. Note the 20-day EMA and the 50-day MA were lined up at $60 for additional support. Then, on Sept 18 and 19, it thrusted up to confirm the break as a real one with a high of 78 3/4 on Sept 19. We know the game is on and this was no fakeout. Nothing brave here. ispeculator.com Sept 20 saw an inside day being made, with a high of 78 1/4. Buy stops would be entered there, at 78 /12. **Note we do NOT enter buy order ABOVE 78 3/4, and instead, enter them at 78 1/2, 1/4 above the high of Sept 20. This buy order can be left in there for 4 days. I have a rule that after 4-6 days, a bull flag will either void itself and fail, or it morphs into a longer consolidation pattern, such as a triangle. But when it breaks from a base like this, I would use 4 days. After 4 days, the buy stop is not filled and we cancel it, and so Plan A to get in did not work. However, we can plainly see that volume contracted during the consolidation to form a triangle. So the "up" scenario is still valid, but not as urgent as the first setup. We then look at our swing chart (soon to be available free at the site) and we can see the swings on the triangle. You take the lower swing high (Sept 27) within the triangle and then add 1/4 to it to enter a second buy stop. Since this is now a bona fide consolidation pattern, you can give it the 6 days, or wait so long as long as it trades within the pattern boundary. A good rule of thumb is that a triangle should last no longer than two weeks. If the buyers are there, they will act within a reasonable amount of time. ispeculator.com This second buy order was filled on Oct 4 and your initial protective stop loss would be the low of the trading day, whatever it was when you got filled. This is placed in case it's a false breakout on the triangle and there is a sudden reversal. The first target to the upside was a test of the top of the flag pole, the high of Sept 19. Upon hitting the target, you move your stop loss to breakeven. From then on, you can decide yourself when to pull up the stops. I would suggest moving it once per day near the close to the low of the day. Teresa