I decided to can the EFX/UN trade altogether as it really doesn't fit my plan and the target is not really all that large unless I wanted to hold it throught the next intra trend pullback (the price usually drops after each successive climb, this is called a pullback, the price going up is a rally).
I do like the setup for SW so I will watch it and buy some shares if I still feel comfortable with the potential.
LNR regained some of the lost price but is still looking like it may continue down slowly or it may rally up after establishing a new low for the lower trend boundary to be set by. I am keeping my eye on this one to see which way it goes to re-enter a trade when the time is right as any stock traded successfully is worth watching for another good trade.
This is a four month chart that shows the important timeframe for the trend reversal, prior to this the price was falling then formed this nice curved shape, the teacup. I could have been bought anywhere along the bottom red line but I didn't get in until the last days of April. I could have seen up to $1 more had I been watching this one earlier...but I wasn't. I think that I bought it the same morning as I found it as the pattern was just to classic to not trade and, in hindsight, it fit my current plan nicely.
Notice that once the red line is started mid-March that the price lows follow the line very closely as if they were bouncing off of it. It only took two weeks to establish this line and it held as a line of resistance right through.
Also worth noting, the upper horizontal red line was established in late 2005 and has been significant three times since not including the brush on May 9th.
The "handle" that has formed over the last weeks is also a classic part of the shape but it doesn't really indicate which way the price might go next. The purple line was my stop setting. The green line is the Trend Within a Trend (TWT) line for the small downtrend. The blue right hand boundary line is still moving as the price continues horizontally...once the price breaks up the line stops moving as it remains touching the last low price.
Should the price break down then I would have to wait to establish the new trend lines.
JD.
i would like to get in on this one when it starts trending up...would u be willing to give us an update?
ReplyDeletek
From LNR on June 3rd...no change in status, the price is at $15.50 Wednesday.
ReplyDelete""For pattern traders the cup and handle is now pretty much complete so we need to see where the price goes from here. I suspect it will see $14.50 to $15 and that would be a good re-entry point for a long position...but I won't bank on the drop from here to there. For me, the CTP trader, I will wait for the next trend to emerge then position accordingly. ""
JD.