$GDP - This stock has been up in the past few weeks and has a decent amount of volume intraday!
Well this pattern is known as the Ascending Triangle but the dvd states it as the ABCD Pattern. What you are looking for is a side ways consolidation period. You can see that I put it as the resistance line because the stock hit that level a couple times. The next thing you are looking for is higher lows and the grinding action. You can anticipate the breakout now and have a set risk/reward trade. For the breakout confirmation, you can look at the volume and as you can see here. Nice breakout for a nice 54 cent per share score! Obviously not everyone would have held till the top, I know I wouldn't have. That is why it is crucial that you lock in your profits and let the rest of your stocks ride if you are confident.
Here is the same stock later in the day. Again, same pattern same thing. Looking for the grinding action and then the higher lows. Once you got that you can anticipate the breakout with a set risk/reward. With that volume confirmation, nice score of 53 cents per share if you would have held till the top!
Here is most of the day and what the stock looked like all day! Great stock to trade, but in this market you should be careful! Very tricky... I limit myself to the mornings only and that is why I do not trade much, because of school!
A lot of people ask why does this work? The reason it works is because charts measure emotion. Everyone is watching these stocks and these patterns have proven over and over again that it works. When these patterns set up, everyone is watching it and buying at the same time. That results into a great breakout. This chart pattern is one of my favorites! I will try to post charts with info like these at least twice a week! Good luck everyone! Email me if you have any questions. I am still a new trader but learning as much as I can because I am inspired to become a full time day trader one of these days!
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