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Monday, February 27, 2006

FLSH - 022706; 15-minute chart

1.) What did I see?
A gap up and weak first bar. The second bar continues to sell off, but reverses and leaves a long lower tail/wick (bullish sign). The third bar closes green, and the fourth bar is narrow-range (narrowest of the morning), and an inside bar.
2.) What is the entry?
A break of the fourth bar high*.
3.) What is the exit?
The target was the Fibonacci extension of the previous day's low to the opening range high; it was hit four bars later.

*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. FLSH made a decisive break of the OR high on the fifth bar.

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