As of 09/26/2022
  Indus: 29,261 -329.60 -1.1%  
  Trans: 11,999 -129.90 -1.1%  
  Utils: 953 -25.04 -2.6%  
  Nasdaq: 10,803 -65.01 -0.6%  
  S&P 500: 3,655 -38.19 -1.0%  
YTD
-19.5%  
-27.2%  
-2.8%  
-30.9%  
-23.3%  
  Targets    Overview: 09/15/2022  
  Up arrow32,000 or 29,200 by 10/15/2022
  Up arrow13,800 or 11,800 by 10/15/2022
  Up arrow1,000 or 950 by 10/15/2022
  Up arrow11,975 or 10,700 by 10/15/2022
  Up arrow3,800 or 3,500 by 10/15/2022
CPI (updated daily): Arrows on 9/13/22
As of 09/26/2022
  Indus: 29,261 -329.60 -1.1%  
  Trans: 11,999 -129.90 -1.1%  
  Utils: 953 -25.04 -2.6%  
  Nasdaq: 10,803 -65.01 -0.6%  
  S&P 500: 3,655 -38.19 -1.0%  
YTD
-19.5%  
-27.2%  
-2.8%  
-30.9%  
-23.3%  
  Targets    Overview: 09/15/2022  
  Up arrow32,000 or 29,200 by 10/15/2022
  Up arrow13,800 or 11,800 by 10/15/2022
  Up arrow1,000 or 950 by 10/15/2022
  Up arrow11,975 or 10,700 by 10/15/2022
  Up arrow3,800 or 3,500 by 10/15/2022
CPI (updated daily): Arrows on 9/13/22

Bulkowski's Big Lots Trading Quiz

Released 7/14/2021.

BLI: 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 (if you find others, great!): Big W, head-and-shoulders top, head-and-shoulders bottom, 2 rising wedges, 2 inverted and ascending scallops.

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

The rising wedge (far right on the chart) is usually a bearish chart pattern, so the upward breakout - when price closes above the top trendline - seems unusual. How do you trade 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?
See the next slide for answers.
3 / 4
chart pattern

Answer 1 (buy?): If you look at the bearish rising wedge as a busted pattern (the breakout is usually downward but it's upward in this example), then buy. But first, check for overhead resistance.

The two red lines are what I think are overhead resistance. I drew them by connecting the peaks, valleys, and congestion areas. The lower red line looks to be too close to the breakout to stop price. Breakouts usually push through nearby overhead resistance. Will it stop at the top trendline? That's the danger of trading a chart pattern that is NOT trading at the yearly high. There's always overhead resistance.

Answer 2 (target?): The stock might stall at the top trendline or continue on to the old high at 18 and form a double top.

Answer 3 (stop?): If you were to buy this stock, a stop placed below the lower wedge trendline would work. I show possible locations as points A-D. Point A looks too close. A quick down move would trigger a sale. B isn't much better. C and D seem to be far enough away to lend protection. Volatility is $0.50, meaning a stop place 50 cents below the low at 14.30 would work. The 14.30 value is the most recent intraday low price shown. That means point A is out but anything at B or below will work. On a percentage loss basis, B is at 9%, C is 11%, and D is 14.2%. That's one of the problems with low priced stocks. A meaningful stop loss point is often a high percentage away from the buy price.

The next slide shows what happened to the stock.
4 / 4
chart pattern

Much to my surprise, the lower bar of overhead resistance stopped price on numerous occasions, forming a broadening chart pattern (right-angled and descending). Buying this stock would have been a mistake.

The End.

See Also

 
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My novels:  Bedroom to Boardroom book Remember Me book Bumper's Story book Head's Law book
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