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Monday, July 31, 2006

THE - 073106; 30-minute chart

posted by Tom C:

This is a pattern that X has discussed in the past. The first bar is wide-range and leaves an upper tail (but closes green). The second and third bars fill in the tail of the first bar, staying in the top 1/2 of that bar's range and closing green. And, the third bar forms a "hammer-type" bar. The entry was a break of the third bar 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.

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