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Monday, March 06, 2006

GRP - 030606; 15-minute chart

Similar to CHK.

1.) What did I see?
A gap down and weak, wide-range first bar. The second bar rallies but fails to penetrate the 50% mark of the first bar. The third bar is narrow range (NR3), closes weak and leaves an upper tail/wick (bearish).
2.) What is the entry?
A break of the third bar low*.
3.) What is the exit?
1/2 sold after $1 gain; the target for the other 1/2 was the Fibonacci extension of the previous day's high to the opening range low; it was hit after 2:00. Actually, it was a few cents shy of the exact number - but I (almost) always set my targets just above (or below) the exact number. And, note how price reversed right in that area.

Set-up grade = B (only because the entry was above the OR low)

*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. GRP made a decisive break of the OR low on the fifth bar.

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