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Tuesday, March 21, 2006

HWAY - 032106; 15-minute chart

I discussed HWAY this morning - here is the chart and analysis.

1.) What did I see?
A gap up and strong, wide-range first bar. The second bar pulls back but does not penetrate very far into the first bar's real body (bullish). The third bar is a narrow-range, inside bar that closes green. The fourth bar is the narrowest range of the morning (NRM), and also closes green. The second, third, and fourth bars all stayed in the upper half of the first bars range (bullish).
2.) What is the entry?
A break of the fourth bar high*.
3.) What is the exit?
1/2 was sold after $1 gain; the target for the other 1/2 was the Fibonacci extension of the previous day's low to the opening range high. It was not hit, and the remainder of the position was closed on a break of the fourteenth bar low.

Set-up grade = B (it was below the OR high)

*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. HWAY made a decisive break through the OR high on the fifth bar.

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1 comment:

Tony said...

That fourth bar is also a gravestone doji, right? I assume you were following what you say that if price can move above the tail, it is bullish. Nice trade.