Bulkowski's Continental Air (2) Trading Quiz

What chart patterns can you find? Look for the following: 2 symmetrical triangles, ascending scallop, big w, double bottom, diamond top, and a flag (could be a pennant).

The Qtr symbol in the upper right of the chart says the company issued a quarterly earnings announcement on that date (the spike).

Answer 1 (buy?): The breakout from the surprising earnings release is downward, so avoid buying. With price near the yearly high, you don't want to short either. I'd look elsewhere for a more promising trade.

Answer 2 (target?): Look what happened at the prior spike, at point A. Price eased lower and that's what I would expect from the stock after the Qtr announcement broke out downward. The stock might find support at the green target line (which it did, for a while).

Answer 3: Since price is expected to drop, placed a stop above where it's trading now. I'd put it above the Qtr spike or maybe above the rounded peak just after the spike. As price drops, trail the stop loss order lower.