As of 01/20/2021
  Indus: 31,188 +257.86 +0.8%  
  Trans: 13,126 +225.85 +1.8%  
  Utils: 865 +7.27 +0.8%  
  Nasdaq: 13,457 +260.07 +2.0%  
  S&P 500: 3,852 +52.94 +1.4%  
YTD
 +1.9%  
 +4.9%  
 +0.0%  
 +4.4%  
 +2.6%  
  Targets    Overview: 01/13/2021  
  Up arrow32,000 or 29,600 by 02/01/2021
  Up arrow13,500 or 12,300 by 02/01/2021
  Up arrow890 or 800 by 02/01/2021
  Up arrow13,500 or 12,400 by 02/01/2021
  Up arrow3,900 or 3,625 by 02/01/2021
CPI (updated daily): Arrows on 11/2/20
As of 01/20/2021
  Indus: 31,188 +257.86 +0.8%  
  Trans: 13,126 +225.85 +1.8%  
  Utils: 865 +7.27 +0.8%  
  Nasdaq: 13,457 +260.07 +2.0%  
  S&P 500: 3,852 +52.94 +1.4%  
YTD
 +1.9%  
 +4.9%  
 +0.0%  
 +4.4%  
 +2.6%  
  Targets    Overview: 01/13/2021  
  Up arrow32,000 or 29,600 by 02/01/2021
  Up arrow13,500 or 12,300 by 02/01/2021
  Up arrow890 or 800 by 02/01/2021
  Up arrow13,500 or 12,400 by 02/01/2021
  Up arrow3,900 or 3,625 by 02/01/2021
CPI (updated daily): Arrows on 11/2/20

Bulkowski's Michaels Stores Trading Quiz

 

Released 11/23/2020.

Michaels Stores: 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 / 6
chart pattern
What chart patterns can you find? Look for the following: 2 inverted and ascending scallops, broadening top, descending broadening wedge, 2 symmetrical triangles, head-and-shoulders top.
Answers are on the next slide.
2 / 6
chart pattern

It's not too late to buy the inverted and ascending scallop in March 2003, but I didn't buy the stock because of it. What other method did I use to signal a buy?

Here's a hint: think trend change.

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?
My answers appear on the next slide.
3 / 6
chart pattern

I used the 1-2-3 trend change approach.

1. Price closes above a down-sloping trendline.
2. Price tests the low at point A.
3. Price rises above the high between the low and test. I show the peak as a green line.
Once the 3 conditions have been met, the trend is said to have changed from down to up. Want more info? See my Getting Started in Chart Patterns book (page 25 in the 1st edition, page 28 in then 2nd edition).

Here's my notebook entry for the trade. I adjusted the numbers for a 2:1 stock split. Note: This stock no longer trades.

"4/11/03. I bought at market around 1 pm. I got tired of waiting and each time I waited, the price climbed. This is near the yearly low, so the risk is reduced. They have raised earnings estimates recently, so that's good but retail sales from major retailers (for example, WalMart) were soft in March. MMU [measured move up] target is 16, Symmetrical triangle SAR [support and resistance] is at the apex at 17.50. Downside is old low at 10, far from the 14.23 purchase price. You might think of this as a 1-2-3 trend change trade, suggesting an upward price trend now. With the war with Iraq winding down, the economy might rebound. There are many bottoms at 14.50, so that might be a repel point too. If it drops, I plan to buy more because I think it's still a good stock with upside potential and the nearby store seems to have the parking lot full."

See the next slide for more excitement.
4 / 6
chart pattern

Price has climbed to a high of 25.31 from the 14.23 buy price. That's a rise of 78%. Price is trending lower. Another sell signal has appeared.

Question: What is the sell signal?

Answer, from my notebook: "1/10/04. I intend to sell half my holdings at the Monday opening (it's Saturday). Three falling peaks [that's the chart pattern sell signal. See the above chart 1, 2, 3. Price has closed below the low at point 4, confirming the pattern and issuing the sell signal] suggests further downward spin. It busted below support/resistance congestion in December 2003 (a small diamond bottom). November head-and-shoulders top is sending prices lower. This should find support at 18.50 - 20 from the horizontal consolidation region in June-July 2003. Since price has closed at the daily low, that suggests a lower low Monday but perhaps, a higher close. It could continue spinning down. It's broken below trendline support, the line starting in May 2003 and connecting August and Dec lows. head-and-shoulders measure rule says a decline to 19.66 from the 22.50 neckline breakout."

The sale filled at 20.78.

See the next slide for more.
5 / 6
chart pattern

Question: Does the chart show another sell signal or will it continue to rise just as it did from the last sale? I must admit that my timing on MIK has been lousy, but that didn't prevent me from making big bucks in it...just not as big as I could have.

Answer, from my notebook: "5/17/04. I sold at market. This is going to "measured move down" to 21, maybe more, so it's time to sell especially with weak same store sales and insider selling.

Date: 5/17/2004. Filled at: 22.78. Mood (sell too soon?): Good. Was time to sell the latest holdings and am confident I saved a few $. I expect this to continue down.

Sell reason: measured move down to 21 or lower. Weak same store sales with insider selling.

See the next slide.
6 / 6
chart pattern

The measured move down is a stair step chart pattern. See my website or my books for more information.

As you can see, the measured move down didn't occur and price went on to make a new high at 43.61. On the trade, I made 60%, including dividends.

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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