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Wednesday, February 08, 2006

ADLR - 020806; 15-minute chart

1.) What did I see?
A gap up and wide-range first bar. The second bar is a narrow-range, inside bar that closes strong.
2.) What is the entry?
A break of the second bar high*.
3.) What is the exit?
1/2 sold after $1 gain; the target on the other 1/2 was the Fibonacci extension of the previous day's low to the opening range high. I closed the remainder of the position on a break of the tenth bar low for a nice gain - however, I should have held for my original target as it was reached at the end of the day!

*as with any entry below/above a previous high/low (in the case of my charts, the opening range (OR) high/low), you need to watch for resistance/support as price approaches those levels. If it stalls, you want to exit. If it breaks through, the odds are good you will have a move to the corresponding Fibonacci extension.

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