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Strategies & Market Trends : Befriend the Trend Trading -- Ignore unavailable to you. Want to Upgrade?

To: Charles Kalb who wrote (20676)	8/8/2001 3:13:33 PM
From: Charles Kalb	Respond to of 39683

PHCC Bull Flag Breakout Today This is an update to my post #20676 on August 1. First, a correction, in that post I said PHCC was in a High Tight Bull Flag (Bull HTF). HTF's are a special type of flag popularized by William J. O'Neil in one of his books. What we have now in PHCC is an ordinary Bull Flag. stockcharts.com[l,a]dacayymy[db][pb50!b200][vc60][iLa12,26,9!Lh14,3!Lg!Lo14!Lm12] I entered this play prematurely on what I thought was a strong intraday breakout on Hourly chart. That was a mistake on my part. This is a formation on the Daily chart and it should confirm or fail based on the Daily chart. Fortunately for me, it appears that today's strong performance will confirm the upside breakout from the flag. At yesterday's close things were looking grim. The flag looked like it was about to go completely limp at the flagpole (no wind in its sails). At the open this morning I had my finger on the sell button and was prepared to take a loss on my premature long call; however, I was pleasantly surprised when the stock gapped up a couple points and quickly ran to a high of 28. There was then an orderly but quick retracement to near current levels. Almost all of today's action took place in first 15 minutes. As I write this, PHCC holding fairly steady around 25.31 (+2.27). The medium-term downtrend line was definitely taken out today. A standard error channel drawn only over the previous nine days of the flag itself define a down-sloping channel, quite reasonable despite the unpleasant downdraft of the previous two days. The slope and volume trend are consistent with Bull Flags. Statistics from Bulkowski, "Encyclopedia of Chart Patterns": * Failure rate of Bull Flag only 13% * 63% of the confirmed breakouts meet the profit projection (the usual "flies at Half Mast" projection). Analysts have recently projected PHCC at 33 in 12 to 15 months; my target remains at 32 within two weeks, the level where the previous peak and 200 MA may present resistance.