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April 24, 2008

Off We Go!

As expected, our consolidation pattern ended with a blast to the upside today, but not before throwing in one last head fake by breaking the triangle briefly to the downside. I warned that this consolidation would be designed by the market gods to throw off bulls and bears alike, and that little dip we had below the triangle was a nice touch.

stock chart

The consolidation measures the current impulse move to the 1420 area. My suspicions are that we will chop our way higher than 1420 through the summer, but we'll assess that once the current move resolves. Today's rally has already taken out 1395, the top of the consolidation zone, so for those without a long position and a desire to have one, I'd look to add on a backtest of 1395. The nice thing about such an entry would be a very tight stop.


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