As of 07/10/2020
  Indus: 26,075 +369.21 +1.4%  
  Trans: 9,312 +172.05 +1.9%  
  Utils: 791 +17.12 +2.2%  
  Nasdaq: 10,617 +69.69 +0.7%  
  S&P 500: 3,185 +32.99 +1.0%  
YTD
-8.6%  
-14.6%  
-10.0%  
 +18.3%  
-1.4%  
  Targets    Overview: 06/30/2020  
  Down arrow24,000 or 27,800 by 07/15/2020
  Down arrow8,400 or 10,000 by 07/15/2020
  Up arrow825 or 700 by 07/15/2020
  Up arrow10,800 or 10,000 by 08/01/2020
  Down arrow2,900 or 3,300 by 07/15/2020
CPI (updated daily): Arrows on 7/10/20
As of 07/10/2020
  Indus: 26,075 +369.21 +1.4%  
  Trans: 9,312 +172.05 +1.9%  
  Utils: 791 +17.12 +2.2%  
  Nasdaq: 10,617 +69.69 +0.7%  
  S&P 500: 3,185 +32.99 +1.0%  
YTD
-8.6%  
-14.6%  
-10.0%  
 +18.3%  
-1.4%  
  Targets    Overview: 06/30/2020  
  Down arrow24,000 or 27,800 by 07/15/2020
  Down arrow8,400 or 10,000 by 07/15/2020
  Up arrow825 or 700 by 07/15/2020
  Up arrow10,800 or 10,000 by 08/01/2020
  Down arrow2,900 or 3,300 by 07/15/2020
CPI (updated daily): Arrows on 7/10/20

Bulkowski's Albermarle Trading Quiz

 

Released 6/8/2020.

ALB: Quiz

Below is a slider quiz to test your trading ability based on an actual trade I made. Captions appear below the pictures for guidance, so be sure to scroll down far enough to read them.

 

1 / 6
chart pattern
What chart patterns can you find? Look for the following: triple bottom, head-and-shoulders, scallop, 2 triangles, broadening pattern.
Answers are on the next slide.
2 / 6
chart pattern

The head-and-shoulders appears as LS, head, and RS. The triple bottom as 1, 2, and 3, marking the bottoms. Price has broken out of the triple bottom/ascending broadening pattern.

Question 1: Do you buy, short, or avoid trading this stock?
Question 2: If trading this one, what is the target price?
Question 3: If trading this one, what is the stop price?
The answers appear on the next few slides.
3 / 6
chart pattern

Here's my notebook entry for the trade.

Date: 6/28/04. Filled at: 31.25. Stop: 28.37, placed 6/28/04. Upside target: 38.94, score of 0.
Mood (will trade work? Bought too soon?): Not as confident as price dropped after I bought. I feel like I'm trading too often. Everything I buy is going up and that means a crash is coming. I'm overtrading just because I feel so good doing it.
S&P direction over pattern lifetime: Lower but just barely.
Future market direction (guess): flat to down. S&P is reaching old highs and I expect overhead resistance to an upward move. If it does punch through, the rise might be swift.
Buy reason: Triple bottom at yearly high with upside breakout. Strong base below. Other diversified chemicals are trending higher. I expect this to continue moving up.

I scored the triple bottom using my Trading Classic Chart Patterns book methodology. The score was 0 meaning the trade was neutral. Scores above 0 tend to meet or exceed the median rise; those below 0 tend to do poorly. When it's 0, it's a toss up as to whether the trade should be taken or not.

Q3: What is the stop price? Answer: I placed the stop at 28.37, as I show in red on the chart. It's an odd number to be beneath round number support zones (like 28.50) and it's below the nearest minor low. If you look at the chart, you'll see all green on the volume spikes for the last 5 days in a row. How much longer would price continue moving up? My handy dandy home brew program says that there's just a 2% chance of price closing higher for a sixth day. That should have served as a warning, but I missed it.

Answers to questions 1 and 2 follow on the next slide.
4 / 6
chart pattern

Q2: What is the target price? Answer: I placed the target at 38.94. That's the triple top high multiplied by the median rise of 26.65% I found for stocks with scores above 0.

Q1: Do you buy, short, or avoid trading this stock? Answer: I bought the stock.

From my notebook. 6/30/04 Stop raised to 29.51.

The stock closed higher the next day and the day after that, too, even though the price range narrowed. It formed what's called a shark-32 pattern. Think of it as a small symmetrical triangle. I raised the stop on the day of the last price bar to the level shown above by the red line.
See the next page for more fun.
5 / 6
chart pattern

Price has dropped from the buy date.

Question: Do you make any changes?

My answer appears on the next page.
6 / 6
chart pattern

Here's my notebook entry for the sale.

Date: 7/22/04. Filled at: 29.50. Mood (sell too soon?): No. Sell reason: stopped out.

The stock hit my stop and sold exactly at the intraday low. As you can see, I sold at the bottom and price took off. This happens sometimes. By raising the stop, I narrowed the potential loss from 9.2% to 5.8%. As you can see, the stock met the predicted price rise of 38.94, suggested by the scoring system. If I sold at the price target the system suggested, I would have made almost 25%. If I sold it at the very peak, I would have made 30%.

The end.

See Also

 
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My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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