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Registered User
Joined: 12/2/2004
Posts: 1,775
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GOK had a sudden change of character on 8/26 contract news. Price/volume surged that day with MS/BOP/TSV/OBV all turning bullish. Key moving average 50-day taken out cleanly, along with July and early Aug. highs. Pattern has pulled back and consolidated into a flag. Target is 7-7.18 area where two major resistance areas meet, the 200-day and lateral resistance line...assuming price can first move above flag's high. which coincides with June high. Nice risk to reward with stop tad under flag's low of 4.92. Flip side above average risk: micro cap, very thinly traded, small float.
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Registered User
Joined: 9/22/2005
Posts: 849
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fpetry
When considering a flag pole and flag (a Dragon), what do you consider for an entry point? A decisive break of the flag or the top of the pole?
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Great find Fpetry:
Just use caution with these my friend as price can move in mysterious ways. One good clue can be found in the low volume just after the spike event. VSA says that the low volume after such a decline is a sign of demand (support) and that we can expect higher prices but the "when" is not always so clear as you can see for your self in my following chart.
Good luck with this and thanks for the chart, I will add it to my collection...
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Hi Apsll,
Thanks for posting the chart. You have shown why it's important to wait for confirmation. Well, actually, you don't have to wait for confirmation because you don't have to do anything in the market, but one way to avoid what you're highlighting here is to wait for the break above the trendline.
Also, I just read today that even though if price is rising into the triangle it has a better chance of breaking to the upside, there's still no guarantee. Price can break either way no matter where the triangle forms. What you're really watching for is the direction that it breaks.
Good example here.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"Well, actually, you don't have to wait for confirmation because you don't have to do anything in the market"
(heh, heh)
Thanks for adding that DJH.
I spend most of my time figuring what I dont have to do.
Thanks
diceman
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Registered User
Joined: 12/2/2004
Posts: 1,775
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QUOTE (bcraig73450) fpetry When considering a flag pole and flag (a Dragon), what do you consider for an entry point? A decisive break of the flag or the top of the pole?
Good question bcraig. I usually take the compromise approach. First entry about a 1/3 size near lows of flag, or even 1/2 size if I can come close to really nailing the low, with an add on breakout a few cents above flag's high.
Davidjohnhall, your argument for waiting for breakout confirmation certainly has advantages.
Apsll, good points, and thanks for posting your chart, davidjohn too, good lessons in each.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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LOL Thanks Diceman, that thought hit me like a ton of bricks when I was typing that post. I've been buying a lot of old trading books from the 60's and 70's and the list of things you can possibly do in the market is which is presented as what you absolutely HAVE to do is endless. It's funny, the approaches always seem to match the market of the times.
Also, I've been noticing the way my own biases can crop up depending on the chart. I can say for one chart, "this is why it's important to wait for confirmation" and based on another chart I can say "this is why it's good to get in early", but the net result over 20-30 trades when coupled with money and risk management might conclude something entirely different.
I guess the best answer would be whichever way makes money for you or whichever way you can use most effectively to make money over many trades. Because if you specialize in this pattern you will begin to align it to your own needs and fuse it with your own emotions and that will make it nearly impossible to teach to someone. haha
David John Hall
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Howdy Fpetry:
I hope that you caught a peice of this one.... You found it right before it popped.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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I see this one continuing (not straight up of course). If the markets have bottomed and are now on the move (Bullish), than I like this 3 month bottom formation laid down here by GOK..
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Registered User
Joined: 12/2/2004
Posts: 1,775
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QUOTE (Apsll) I see this one continuing (not straight up of course). If the markets have bottomed and are now on the move (Bullish), than I like this 3 month bottom formation laid down here by GOK..
Apsll, wish you hadn't asked me:( Uhhh, no I'm not in it. Had a small position at 5.12, got stopped out at 4.86 on 9/7 gap down. The setup was busted as far as I was concerned, removed it from watchlist after exit. Then today is popped up on a scan but I didn't bite because too extended for me. If I had been watching it closely I might have entered a starter position just above yesterday's high and added near close. I probably should have bought some at close anyway, but mind elsewhere. Now that I'm out it'll probably shoot right up to 7 area at least. Agree with you on the 3 mo. bottom.
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Registered User
Joined: 4/10/2006
Posts: 954
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GOK has a chance to hit 7.15-25 if the market keeps a bullish tendency.
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