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Sunday, May 20, 2007

BG - 051807; 15-minute chart

Earlier last week, Tom C. featured a "beyond the Fibonacci extension" set-up. BG presented another opportunity on Friday, and gave several chances to enter.

Note how the second and third bars close above the Fibonacci extension, and then price rolls over. The seventh bar resumes the uptrend, and the eleventh bar closes back above the Fibonacci extension - this is a variation of the set-up I have discussed numerous times over the last few months where a candle crosses a key level and closes strong (opens at the low, closes at or near the high). A break of the eleventh bar high was the first possible entry.

The twelfth, thirteenth (my lucky number), fourteenth, and fifteenth bars consolidate on top of that level, and the fifteenth bar forms a hammer-type candle. A break of the fifteenth bar high was the second possible entry.

A break of the sixteenth bar high was the third possible entry - it was a narrow-range candle that lifted off an area of support, closed strong, and had support from a rising 5MA (note - ALL of the entries had solid support from a rising 5MA).

BG rallied the rest of the day - I sold 1/2 of my position after $1 gain and sold the rest at the close. I saw no reason to exit any sooner.

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Ted said...

Is this setup as consistent as the others?

R.J. said...

I think it is consistent, but harder to find a good setup that meets the criteria.