CAT - 092805

1.) What did I see?
A gap up and total collapse through the "retracement zone". A brief pullback in the third bar and a bearish candlestick on the fourth bar.
2.) What is the entry?
A break of the fourth bar low.
3.) What is the exit?
Notice how the previous day's low is broken, but CAT pulls back before it reaches the Fibonacci extension. This is a great low risk set-up as the stock will usually resume the downtrend and hit the extenison. That is the target, and it is hit several hours later.