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 Yellow Roadway Trading Quiz

 

Released 12/16/2020.

YELL: 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: ascending triangle, symmetrical triangle, triple top, rectangle top, and a right-angled and ascending broadening pattern, with three patterns appearing on top of each other.
Answers are on the next slide.
2 / 6
chart pattern

The light green formation in October 2003 is an ascending triangle. The tops 1, 2, and 3 are a triple top, unconfirmed. The blue lines show the outline of a rectangle top.

Concerning the symmetrical triangle in August/Sept 2005, it broke out downward and then reversed direction to shoot out the top of the triangle, busting it. That suggests a powerful up move, or does it?

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

Answer 1 (buy?): Buy. Busted patterns tend to do very well, so if you see one, consider trading it.

Answer 2 (target?): Here's an alternative way to find the target instead of using the measure rule.

This is a zoom of the symmetrical triangle. Begin from the highest high in the pattern and draw the red line parallel to the bottom of the sym triangle (shown as a duplicate line in green for clarity). The price where the red line reaches the DATE of breakout becomes the target. I show the intersection with a circle. The price of the circle is the target price and it's slightly below 46. Since we have no overhead resistance, that makes trading this stock easier.

Answer 3 (stop?): Where should you place a stop? A stop placed below the minor low I show as point A I think would work. Volatility is $1.89, so a stop no closer than 41.42 would help keep you from being stopped out on normal price fluctuation. That's 1.89 minus the current low of 43.31.

More on the next slide.
4 / 6
chart pattern

Here's my notebook entry for the trade.

"Date: 9/8/04. Filled at: 44.279. Stop: 40.70 or 8% Just below triangle bottom. Placed 9/8/04. Upside target: 56.14. Future S&P direction (guess): up.

Buy reason: Busted symmetrical triangle with upward breakout (initially broke out downward but only by a little). Reported better than expected strength in its markets, so earnings will do well. The stock is up on a down day. Score: +4 with 56.14 target. The trucking stocks are the best performers over last 6 months and this stock is doing very well. I expect the good news to continue."

I placed the stop closer, at 40.70 which I show as the red line. That means I could tolerate an 8% decline before being stopped out. The upside target is 56.14. I found that by using the scoring system I discussed in my book Trading Classic Chart Patterns. The chart pattern had a +4 score, suggesting it was likely to reach the median rise of 56.14.

More on the next slide.
5 / 6
chart pattern

As you can see, price has climbed to the 56.14 target and peaked at 56.81, slightly exceeding the target. Here's my notebook entry and it concerns stop placement. I show them on the date and price where they were applied as red circles.

"9/30/01: Stop raised to 43.75 after the close. 11/17/04: Stop raised to 46.93. 11/19/04: Stop raised to 47.93. 12/2/04: Stop raised to 49.43. 12/6/04: Stop raised to 50.83. 12/21/04: Stop raised to 51.77. 12/23/04: Stop raised to 52.77. 12/29/04: Stop raised to 53.77."

Notice how the dots cluster as I get more nervous about the stock. Here's the final notebook entry.

Date: 1/5/2005. Filled at: 53.776. Sell reason: Hit stop.

The stop forced a sale, but was this the proper selling point? What would you have done?

More on the next slide.
6 / 6
chart pattern

Price backtracked a bit before surging to new highs, reaching 64.47. Then the stock tumbled back down to a low of 38.81 as the price of gas took off. I made just over 21% on the trade.

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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