Here’s How I Trade The Triangle
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Just because it’s the start to a new
trading day doesn’t necessarily mean that a stock gets a fresh start too.
09:33:09
Intraday
Setup Alert
Cardinal Health (CAH)
appears ready to resume its trend down. The stock has a 3
Month RS of 17 and is currently trading out of an extended intraday
descending triangle. The stock is off .10 at 56.65, and through yesterday’s
lows.
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As you can see from the above chart, Cardinal was
looking anything but healthy as we closed the session last evening. Carrying
over a pattern from the prior day’s price action can quite often yield very tidy
profits. Part of the reason for this may be that it’s known amongst trading
professionals that “big money” likes to reposition themselves during
the final hour of trade. Looking at Cardinal, the descending triangle takes on
some bearish implications that might otherwise go unaccounted.
Even with a well positioned trade we
still need to take care of the money management part of the equation. You can
see how we took profits in this example, which is part of our trade management
methodology in the new Triangle
module.
 It doesn’t always hold true of course, but
in CAH’s case, and the reason why we try to emphasize these plays in the Nightly
Daytraders Report, it works out like a charm.