Here’s An Interesting Triangle Setup
I’m always an
"avid" fan of finding
strong stocks off of temporary weakness. Eventually all good things must
come to an end, so one way to gain a continuation entry, without attempting to
catch a "falling knife" is to play consolidation patterns that reflect a
resumption of the stock’s prior character.
11:23:42
Intraday
Setup Alert
From the Nightly Daytraders
Report Avid Technology (AVID)
has rallied to reclaim lost ground in the form of an intraday gap down. This
action has the stock forming a micro triangle.
Breakouts above this resistance level are set above 30.53 (High + .06), with the
issue up .04 at 30.44.
The stock had
experienced temporary weakness on an analyst downgrade, coming on the heels of
52-week highs set in Friday’s session. Would the stock be able to resume the
strong price-and-volume action seen the day before? I didn’t know ahead of time,
but I was ready for any patterns that might indicate that a low risk-to-reward
entry was available. For me, that setup was the second ascending-triangle
pattern of the day. The stock had filled a price gap, was now in the plus
column, and most importantly, a well-defined formation had developed, with which
I could measure my initial risk. The only question left is how much of an
AVID fan of triangles are you?