As of 05/20/2022
  Indus: 31,262 +8.77 +0.0%  
  Trans: 13,491 +51.76 +0.4%  
  Utils: 991 +1.46 +0.1%  
  Nasdaq: 11,355 -33.88 -0.3%  
  S&P 500: 3,901 +0.57 +0.0%  
YTD
-14.0%  
-18.1%  
 +1.0%  
-27.4%  
-18.1%  
  Targets    Overview: 05/15/2022  
  Up arrow33,500 or 30,500 by 06/01/2022
  Up arrow14,700 or 12,400 by 06/01/2022
  Up arrow1,050 or 940 by 06/01/2022
  Up arrow12,800 or 11,000 by 06/01/2022
  Up arrow4,150 or 3,700 by 06/01/2022
CPI (updated daily): Arrows on 4/21/22
As of 05/20/2022
  Indus: 31,262 +8.77 +0.0%  
  Trans: 13,491 +51.76 +0.4%  
  Utils: 991 +1.46 +0.1%  
  Nasdaq: 11,355 -33.88 -0.3%  
  S&P 500: 3,901 +0.57 +0.0%  
YTD
-14.0%  
-18.1%  
 +1.0%  
-27.4%  
-18.1%  
  Targets    Overview: 05/15/2022  
  Up arrow33,500 or 30,500 by 06/01/2022
  Up arrow14,700 or 12,400 by 06/01/2022
  Up arrow1,050 or 940 by 06/01/2022
  Up arrow12,800 or 11,000 by 06/01/2022
  Up arrow4,150 or 3,700 by 06/01/2022
CPI (updated daily): Arrows on 4/21/22

Bulkowski's Alaska Air (4) Trading Quiz

 

Released 5/10/2021.

ALK: 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: descending triangle, 2 head-and-shoulders bottoms, double top, 2 falling wedges, and a broadening formation, right-angled and ascending.

Answers are on the next slide.
2 / 4
chart pattern

Price has pierced the neckline of the head-and-shoulders bottom and closed above 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 / 4
chart pattern

Answer 1 (Buy?): Buy because of the upward breakout.

Answer 2 (Target?): Use the measure rule and compute the height of the pattern from the head low (see the April pattern, not the October Head-and-shoulders top) to the neckline directly above. That's 17.70 - 15.28 or 2.42. Add this to the price where it pierces the neckline (16.90) to get a target price of 19.32. Price reaches the target 71% of the time, so look for overhead resistance that might stop an advance. From looking at the chart, I'd say the two shoulder lows from the October head-and-shoulders might be a problem. I show this as a horizontal line that rests just above the broadening formation in Feb-March '03.

Answer 3 (stop?): Volatility is 1.07, so a stop no closer than 15.63 (the most recent intraday low of 16.70 - 1.07) would work. That would place the stop below the right shoulder.

The stock moved up after the head-and-shoulders bottom eventually forming a head-and-shoulders top. Question: If you own the stock, what do you do now?

My answers appear on the next slide.
4 / 4
chart pattern

Answer: Sell. Since price has run up in a straight-line run, it might duplicate that on the downhill decline - a straight line run that takes price down quickly, bottoming at 24+. That's where I see a good support zone. I show it as a horizontal line in the chart. Measure the height of the head-and-shoulders to project a downward price target. That gives a 22.14 target by my calculations. From the 27.25 breakout price, that's a decline of 19% and that's a loss you don't want to be a part of.

As you can see, price pulled back to the head-and-shoulders top and almost climbed above the right shoulder top before resuming the downtrend. The horizontal blue line supported price in December '03 and acted as resistance in June '04. It caused price to stall in Sept-October 2004. Also note that the price didn't decline in a straight-line run, mirroring the move from the August low. Go figure.

The End.

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