|
|
| |
|
 November
10, 2004 Commentary (mid-week edition)-
Today I'm
going to take a look at a setup that formed Tuesday morning in MSFT. 'Softee'
has been trending up strongly for the last two weeks on the 13-minute
timeframe. It gapped up and then began to form an ABCD pattern. Let's start
with how the latter part of the uptrend looked on the 13-minute chart.
The ABCD can be seen in the upper right hand
part of the chart. Keep in mind that this is the 'context' timeframe. I am
looking at the 3-minute chart as the traded timeframe. Let's take a look down
there, with the pattern highlighted.
Next, I'll put some numbers on the chart from
the grouping I began to put together. I will put the numbers from the pattern
itself, and from that obvious swing-low point on the chart. I want to see how
that shapes up. In reality, I start doing this as soon as I see an ABCD
starting to shape up, which is as soon as I can discern a completed C point. I
just show it now, with the price action at the potential trade area, to save
myself doing too many charts in the commentary.
The numbers I put together fell in a tight
grouping. They may appear spread out in this close up chart, but the grouping
is actually less than two cents wide! I am now going to add two more numbers
in, an .886 off the low of the day, and a .146 from the afternoon low of last
Wednesday. (This latter retracement, and its use, is laid out in Kane Trading on: A Totally New 5-Point
Pattern.) Let's see how they fit.
They fell right into the grouping. I am
testing the 'harmonicity' here
when I do this, not just trying to fit anything to my grouping. I already have
the pattern grouping before this. I'm trying to see if the harmonics of the
pattern line up with the harmonics from the trend. This is explained in the
book series in detail, especially in Kane Trading on: A Totally New 5-Point
Pattern (see excerpts 5, 6, and 7). Now I'm ready to look at a
potential trade. Let's see what old 'Softee' did from here.
This was one of those cases where it turned
out to be a 'home run'. I have no idea which ones will move like this. I just
set them up and then it plays out like it plays out. Having a management plan
that allows me to stay with runs like this is part of my 'Trading Plan'. For
me, management is key. When I
do catch a runner, I need to not bounce myself out at some 'profit target'. I
need to maximize the run as best as I can.
The next commentary will be the
weekend edition, posted by Sunday evening.
|
|
|
| |
|
|
 NOTE: Reading this page or
any page on the Kane Trading website, or utilizing this website and any
material
contained herein in any way, shall constitute an
acknowledgement that you have read, understood and agreed
to
all the disclaimers,
terms & conditions, and
policies of this site.
|
|
|
This
website is best viewed with MSIE 6.0, text size set to medium, and screen
resolution set to 1024 by 768.
Copyright
© 2004 Kane Trading. All rights reserved.
|
|
