As of 12/04/2020
  Indus: 30,218 +248.74 +0.8%  
  Trans: 12,742 +155.26 +1.2%  
  Utils: 856 -10.76 -1.2%  
  Nasdaq: 12,464 +87.05 +0.7%  
  S&P 500: 3,699 +32.40 +0.9%  
YTD
 +5.9%  
 +16.9%  
-2.6%  
 +38.9%  
 +14.5%  
  Targets    Overview: 11/30/2020  
  Up arrow30,700 or 28,250 by 12/15/2020
  Up arrow13,500 or 11,700 by 12/15/2020
  Down arrow830 or 925 by 12/15/2020
  Up arrow12,500 or 11,400 by 12/15/2020
  Up arrow3,750 or 3,400 by 12/15/2020
CPI (updated daily): Arrows on 11/2/20
As of 12/04/2020
  Indus: 30,218 +248.74 +0.8%  
  Trans: 12,742 +155.26 +1.2%  
  Utils: 856 -10.76 -1.2%  
  Nasdaq: 12,464 +87.05 +0.7%  
  S&P 500: 3,699 +32.40 +0.9%  
YTD
 +5.9%  
 +16.9%  
-2.6%  
 +38.9%  
 +14.5%  
  Targets    Overview: 11/30/2020  
  Up arrow30,700 or 28,250 by 12/15/2020
  Up arrow13,500 or 11,700 by 12/15/2020
  Down arrow830 or 925 by 12/15/2020
  Up arrow12,500 or 11,400 by 12/15/2020
  Up arrow3,750 or 3,400 by 12/15/2020
CPI (updated daily): Arrows on 11/2/20

Bulkowski's Southwest Airlines Trading Quiz

 

Released 11/20/2020.

Southwest Airlines: Quiz

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

 

1 / 4
chart pattern
What chart patterns can you find? Look for the following: rising and falling wedges (1 each), descending triangle, right-angled and descending broadening formation (RABFD), inverted and ascending scallop.
Answers are on the next slide.
2 / 4
chart pattern

The HCR is a horizontal consolidation region isn't horizontal but if you take a chainsaw and cut the spike on the bottom and the few on the right edge, it's nearly flat. The flag (center) is a flag but not one I'd trade because it doesn't have a vertical flagpole. It's more of a HCR -- a support or resistance zone. The RABFD on the right has broken out upward. It then threw back but is now heading higher. That's the buy signal.

Question: Do you buy the stock? Be sure to include a stop price and upward target price.
3 / 4
chart pattern

Here's my notebook entry for the trade.

Date: 6/9/2004. Filled at: 15.81. Stop: 14.27, 9.7% away. This is just below the low on 4/21/04. Upside target: 17, using height measure rule: 15.30 + (15.30 - 13.56). Mood (will trade work? Bought too soon?): Cautious. Other airlines are moving lower, so I don't really trust this one. Long term, I think the price is a good one. Short term, who knows? S&P direction over pattern lifetime: Down. Future market direction (guess): Dow transports will stall soon as it reaches old high in January. S&P same: Up but will likely stall in the coming days as it matches late January peaks.

Buy reason: Throwback from RABFD completed and oil prices are trending down. Since most of the fuel is hedged, the price won't make much difference. If the stock can push through the HCR (flag in Dec '03), then this has a chance of moving up.

The next slide shows the sale.
4 / 4
chart pattern

Stops appear as black dots at the time and price placed.

6/21/04: Stop raised to 14.87. 6/28/04: Stop raised to 15.41

7/13/04: Filled at: 15.41. Mood (sell too soon?): I expected this because the last 2 days the stock neared the stop. Not upset, just disappointed. Sell reason: stopped out. I should have sold when the stock jumped up 5% in one day [that's an event pattern I call an inverted dead-cat bounce]. Oops! Instead of taking a 4 digit profit, I took a 3 digit loss. The good news is that I raised the stop loss to cut it to 2.5%.

The End.

See Also

 
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