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Tuesday, December 06, 2005

SMTS - 120605; 15-minute chart




Yesterday (and in the past), I talked about Fibonacci extensions and how if price moves through that area with strength/sets-up above the extension, there is a high probability for a continued move.

Today, SMTS provides a textbook example - the third bar closes above the Fibonacci extension and the following bars narrow in range, culminating with the sixth bar forming a hammer and again closing (just) above the Fibonacci extension.

SMTS proceeds to run another $1.65 from that point to the high.

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