How A Stock Can Trigger Later On After Initial Failure
Quite often an alert goes up, but
doesn’t trigger immediately. Realistically, quite a few might end up going
in the opposite direction, especially in choppy trade. Our focus and concern
should remain on those issues that are still showing some trading edge, allowing
for a possible entry later on, as a fresh ‘confirming’ pattern sets up in the
hours that follow.
11:30:04
Intraday
Setup Alert
Netease.com (NTES)
is up approximately 1.8 pts. at 35.81. The stock is forming an intraday Slim
Jim. Triggers above pattern resistance are set above 36.05 (pattern highs
+.05), with recent 52-Week Highs 2% above, at 36.80.
The pattern above failed to trigger, but instead
of writing it off as a failed pattern or resumption of trend, it sometimes pays
to keep a vigilant eye for new developing patterns that still confirm the bigger
picture.
In the case of
(
NTES |
Quote |
Chart |
News |
PowerRating), the stock continued to
consolidate into a larger triangle pattern, or possibly a Cup & Handle,
depending on how you like to define your patterns, and risk parameters. The triangle
set up technically cleared the prior intraday resistance at the 36 level, while
the larger Cup pattern would have resulted in potential breakout
entries 5 bars later. This action had the stock clearing the pivot highs of the
handle, as well as the session highs.
So even though a High RS stock might ‘ease’ up
for a bit, ‘net net’ it pays to keep a handle on developing patterns that
confirm the trend.