When You See This Happen, You Can Count On A Large Move
When you see a narrowing range, you know that
it will eventually be resolved to a more normal range. This is the nature of
volatility. A tight range will break out into a larger range. This is also the
basis of Kevin Haggerty’s Slim Jims.
A narrowing range doesn’t have to come in the form of a Slim Jim, though — it
can be a triangle. And triangles tend to resolve themselves in the direction
of the main trend.
TradersWire subscribers got this insight
earlier today:
10:52:33
Intraday Setup Alert
Neurocrine Biosciences (NBIX)
is trading in a consolidation near its lows. NBIX is trading at
47.94, down 1.19.
Neurocrine Biosciences fell from the open and
started consolidating into a triangle. The narrowing range pointed to an
eventual break out of the range. Since the trend was down, we showed the
insight in red letters, indicating our bias. Shortly thereafter, the stock did
indeed fall out of its triangle, making lows of 47.12 at 11:50.
Pay attention to narrow ranges — they can pay
off handsomely. (And if you really want to learn how to trade them well, Kevin
can help you.)
Have a great weekend,