HCC Entry 15.15 | Stop 13.95 | Target 20
8% Risk | 32% Reward
1: 4 RR
Continuation Pattern
Bullish Pennant
Price highs move slightly lower and price lows move slightly higher. Drawing a trend line connecting price highs and then another connecting price lows form two converging lines which are an identifying feature of the pennant.
IDENTIFICATION GUIDELINES
1. The Shape of The Bullish Pennants- Price bounded by two converging trendlines. Typically, in an uptrend the top of a bullish pennant is downsloping. This makes sense since, in an uptrend, profit taking will result in lower prices as traders sell stock.
2. Formation of The Bullish Pennants – Bullish pennants involve two distinct parts, a near vertical, high volume flagpole and the symmetrical triangle, low volume triangular consolidation comprised of four points and an upside breakout. The triangular consolidation during the formation of the pennant is very much like a symmetrical triangle and this implies that traders feel comfortable with the current price.
3. Duration of The Bullish Pennants – Pennants formation are short term, from a few days to 3 weeks. Formation longer than 3 weeks often fails.
4. Volume inside The Bullish Pennants – Volumes tends to be decreasing through the formation.
5. Pre-mature or False Breakout – Because volume is usually low throughout the formation, it takes very little activity to bring about an erratic and false movement in price, talking the price outside of trendlines.
6. Breakout – Price closing above the upper trendline confirms the breakout.
HOW TO TRADE THE BULLISH PENNANT
Trading Rules.
1. Entry – Buy the stock day after Prices closing above the upper trendline. If you miss, Wait for the pullback to the upper trendline and buy once price resumes in the breakout direction.
2. Price Target – The technical target is, measure the height of the flagpole, the start of the sharp straight up move, and add the hight of the pole to the upper trendline.
3. Taking Profit – For short-term traders, sell the stock when the price reaches near to the price target. For intermediate and long-term traders, hold the stock as per your risk & capital management applied before entering into a trade.
4. Stoploss – usually, price closing below the lower trendline is a stop-loss.
8% Risk | 32% Reward
1: 4 RR
Continuation Pattern
Bullish Pennant
Price highs move slightly lower and price lows move slightly higher. Drawing a trend line connecting price highs and then another connecting price lows form two converging lines which are an identifying feature of the pennant.
IDENTIFICATION GUIDELINES
1. The Shape of The Bullish Pennants- Price bounded by two converging trendlines. Typically, in an uptrend the top of a bullish pennant is downsloping. This makes sense since, in an uptrend, profit taking will result in lower prices as traders sell stock.
2. Formation of The Bullish Pennants – Bullish pennants involve two distinct parts, a near vertical, high volume flagpole and the symmetrical triangle, low volume triangular consolidation comprised of four points and an upside breakout. The triangular consolidation during the formation of the pennant is very much like a symmetrical triangle and this implies that traders feel comfortable with the current price.
3. Duration of The Bullish Pennants – Pennants formation are short term, from a few days to 3 weeks. Formation longer than 3 weeks often fails.
4. Volume inside The Bullish Pennants – Volumes tends to be decreasing through the formation.
5. Pre-mature or False Breakout – Because volume is usually low throughout the formation, it takes very little activity to bring about an erratic and false movement in price, talking the price outside of trendlines.
6. Breakout – Price closing above the upper trendline confirms the breakout.
HOW TO TRADE THE BULLISH PENNANT
Trading Rules.
1. Entry – Buy the stock day after Prices closing above the upper trendline. If you miss, Wait for the pullback to the upper trendline and buy once price resumes in the breakout direction.
2. Price Target – The technical target is, measure the height of the flagpole, the start of the sharp straight up move, and add the hight of the pole to the upper trendline.
3. Taking Profit – For short-term traders, sell the stock when the price reaches near to the price target. For intermediate and long-term traders, hold the stock as per your risk & capital management applied before entering into a trade.
4. Stoploss – usually, price closing below the lower trendline is a stop-loss.
Trade active:
Entry @ 15.20
Trade closed: stop reached:
13.85
Comment:
