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Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions.
See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.
Frontier Oil Trade Setup
In November 2010, I became interested in Frontier Oil (FTO) stock, shown in the figure. Buy indications? The stock was trending higher along with the industry but not the S&P 500 index.
On the weekly scale, I found a flat base pattern.
The commodity channel index (CCI) said to buy the day before. The RSI and Bollinger bands said
nothing of interest. I usually ignore all three anyway...
I saw overhead resistance at 17 and 25, so with the stock trading at 15.50, there was nearby overhead resistance. I considered this a long-term holding, so I used no stop.
This is what I wrote in my notebook about the trade: "Chart pattern traded: Descending triangle, trendline breakout, and flat base. Descending triangle is long-term from peak in June '09,
but bottom is irregular. Trendline is on top of the descending triangle. Flat base goes back to Jan 2009.
"Buy reason: Upward breakout from down trendline on weekly scale since June 2009. Overhead resistance at 17 is going to be a problem. And who knows about environmental regulation going into 2012.
I don't see this doing much, but it could begin trending based on the monthly scale and past rises followed by 1-2 years of flat movement."
I bought the stock and received a fill at 15.47 on 11/26/10.
Frontier Oil Trade Sale
Fast forward to mid February. With price shooting up in a fast, straight-line run, I decided to protect some of my profits with a stop. From my notebook,
"2/16/11. I placed a stop below February 14's low, at 24.68. This is 3-lines back (including today's). I want to make sure I capture the rapid rise upward with a trailing stop."
I raised the stop again, on 2/17. "2/17/11 stop raised to 25.35, below 3 day low."
I show the February 17's candle at A so the low three lines back (including A) is where the dashed line is. A week later, the stock hit my stop and took me out at 25.35 for a
64% gain in about three months.
-- Thomas Bulkowski
See Also
- Coldwater Creek (CWTR), congestion breakout on entry, hit stop on exit, 83% in 7 weeks.
- CNO 2.0. Fibonacci retrace on entry, inverted dead-cat bounce on exit. I made 90% in 2 months.
- Encore Wire (WIRE), rounded bottom on entry, inverted dead-cat bounce on exit, +24% in 2 months.
- Hudson Highland Group (HHGP), head-and-shoulders on entry, hit stop on exit, +55% in 3 months.
- National Fuel Gas (NFG), ascending triangle on entry, hit target on exit, +23% in 3 months.
- Vivus, full retrace of gap on entry, sell on symmetrical triangle breakout and bad news, 37% in 7 months.
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Written by and copyright © 2005-2019 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions.
See Privacy/Disclaimer for more information. Some pattern names are the registered trademarks of their respective owners.
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