The pattern I look for at the end of each week
This is a pattern that I check for at the end of
the week that takes about half an hour but can lead to explosive gains. I keep a
watchlist of stocks that meet my fundamental and technical criteria.
At the end of the week, I look for the following:
1) Price action on weekly charts.
2) 50% move in price within a 6-8 week period.
3) Volume minimum 100K average over the last 20 days.
For example, Hansen Natural Beverage (HANS) had a 50% move off its low of
the 2-10-06 weekly bar and within a six-week trading range. This stock becomes a
5-star priority on my watchlist and I look for an entry above the high of the
1-13-06 weekly bar.
The entry is 13 cents above a pivot high of $104.79 (the high of the 1-13-06
weekly bar at the time it met the setup conditions). I got the entry right as it
met the conditions of the setup and was filled at an average price of $105.24 on
the 3-10-06 weekly bar.
The stock starts a steady climb into May without so much as a hiccup and then on
5-09-06 the stock gaps up over 18 points from the previous day’s close and I
sell into the strength of the move at an average price of $172.91. I average
$67.67 a share or around a 64% return in about two months.
I have been watching for these kinds of patterns since last Fall and I have seen
similar moves in TIE, IFO, and others. I am currently working on fitting these
patterns to daily charts too.
Keep an eye out for these kinds of patterns within your stock watchlist at the
end of each week and you might find yourself rewarded with some huge gains.
Good Luck and good trading.
Billy Williams
www.stockoptionsystem.com