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Sunday, November 06, 2005

FARO - 110405

1.) What did I see?
A gap down and rally into resistance from the retracement zone of the previous day's high to the opening range low. Note the "upper tails" on the first and second bars (bearish), and the reversal in the second and third bars. The fourth bar is a narrow range (compared to the first three) "hanging man".
2.) What is the entry?
A break of the fourth bar low.
3.) What is the exit?
The target was the morning low - it was not reached, and the position was closed at the end of the day. Even though the target was not reached, the trade still netted .80, or ~4%.

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