This Is Why You Need To Know The Depth Of The Second Bottom

  • September 1, 2004
  • Tsutae Kamada

A bear flag can be a
very bullish signal. It sounds silly, but let me show you what has
happened.

09:49:19
(From TradingMarkets TradersWire)


Intraday Setup Alert


Electronic Arts (ERTS), on the 3-minute chart, is forming a bear flag.
ERTS is down 2.11 at 47.67.

10:20:54

Follow up on the 09:49 story (ERTS)


The stock has reversed to the upside. It is approaching the opening gap. ERTS is
down 1.59 at 48.19.

As you can see, shortly after the gap down opening, the stock formed a bear
flag. It briefly traded below the flag, but it never tested its intraday low.
Instead of resuming the downtrend, ERTS shaped a 1-2-3 bottom and reversed to
the upside.

If a stock is not testing its previous low, buyers are more aggressive than you
think. 

T.kamada

If you have questions, feel free to ask me. I will try to answer you as
quickly as I can.