As of 04/21/2021
  Indus: 34,137 +316.01 +0.9%  
  Trans: 15,040 +145.39 +1.0%  
  Utils: 927 -6.07 -0.7%  
  Nasdaq: 13,950 +163.95 +1.2%  
  S&P 500: 4,173 +38.48 +0.9%  
YTD
 +11.5%  
 +20.3%  
 +7.2%  
 +8.2%  
 +11.1%  
  Targets    Overview: 04/15/2021  
  Up arrow34,800 or 32,900 by 05/01/2021
  Up arrow15,200 or 14,000 by 05/01/2021
  Up arrow950 or 885 by 05/01/2021
  Up arrow15,000 or 12,900 by 05/01/2021
  Up arrow4,400 or 3,900 by 05/01/2021
CPI (updated daily): Arrows on 3/25/21
As of 04/21/2021
  Indus: 34,137 +316.01 +0.9%  
  Trans: 15,040 +145.39 +1.0%  
  Utils: 927 -6.07 -0.7%  
  Nasdaq: 13,950 +163.95 +1.2%  
  S&P 500: 4,173 +38.48 +0.9%  
YTD
 +11.5%  
 +20.3%  
 +7.2%  
 +8.2%  
 +11.1%  
  Targets    Overview: 04/15/2021  
  Up arrow34,800 or 32,900 by 05/01/2021
  Up arrow15,200 or 14,000 by 05/01/2021
  Up arrow950 or 885 by 05/01/2021
  Up arrow15,000 or 12,900 by 05/01/2021
  Up arrow4,400 or 3,900 by 05/01/2021
CPI (updated daily): Arrows on 3/25/21

Bulkowski's Vertex Pharmaceutical Trading Quiz

 

Released 12/11/2020.

VRTX: 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 / 7
chart pattern
What chart patterns can you find? Look for the following: Dead-cat bounce, broadening top, diamond bottom, descending triangle, triple bottom (unconfirmed), double bottom.
Answers are on the next slide.
2 / 7
chart pattern

Price has broken out upward from the large descending triangle.

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 / 7
chart pattern

Answer 1: Buy because of the upward breakout of the descending triangle. Answer 2, 3: See the next page.

This is the weekly chart. I show the rounding turn in the blue line and overhead resistance in red.

Here's my notebook entry for the trade. "Date: 10/7/04, filled at: 11.25. Stop: 9.57, below the lower broadening top boundary. That's a large decline of 15%. Upside target: I see price stalling at 12.25 but pushing through. This could be at the bottom of a very long rounding turn, with top at 96. See monthly/weekly scale. 16.50 looks like a good upside target. That is the site of an old high in June, August and in prior years (fall '99). Future S&P direction (guess): down as it's at top of descending broadening wedge. It could breakout upward, though. Buy reason: triple bottom, pipe bottom, and broadening top all signal a buy. It's been a year since the dead-cat bounce and with this flat base, the stock could move up. The bad news is that I am late getting in...again."

The following slide shows the next part of the trade.
4 / 7
chart pattern

This is a screen shot of the stock on the daily scale and the S&P 500 on the lower half. Notice how the index was climbing, forming a large descending broadening wedge or maybe a channel. I predicted the index would drop. If so, why was I buying?

More on the next slide.
5 / 7
chart pattern

This shows that I placed the stop below September's minor low but I placed the stop on the day I bought. As I mentioned in my notebook, the stop is 15% away from the buy price but as you can see, it worked well because anything much closer and I would have been stopped out. That's the price you pay when you trade stocks below $15 or so (very volatile).

Question. On the last day shown, I did something important. What was it?

My answer appears on the next slide.
6 / 7
chart pattern

Answer: "12/16/04: Stop raised to 10.23."

This chart shows the day and price that I placed the stop. You can also see that price hit the stop. Here's my notebook entry for the sale.

Date: 1/3/2005, filled at: 10.232. Sell reason: Hit stop."

How timely was the sale?

The next page shows the result.
7 / 7
chart pattern

I show this on the weekly scale. After I sold, price moved up to A at a price of 11.99 and then tumbled to a low of 8.61 at B. After that, price recovered, making a straight-line run upward.

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 Trading Classic Chart Patterns

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