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 Intertape Polymer (ITP) Trading Quiz

 

Released 11/29/2021.

ITP: 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 / 3
chart pattern

What chart patterns can you find? Look for the following (if you find others, great!): 2 head-and-shoulders bottoms, rising wedge, three rising valleys, and a dead-cat bounce.

The answer is on the next slide.
2 / 3
chart pattern

The rising wedge has an upward breakout, confirmed when price closes above the top trendline.

Question 1: Do you buy or sell short the stock?
Question 2: What is your price target?
Question 3: What is your stop loss price?
See the next slide for answers.
3 / 3
chart pattern

Answer 1 (buy?): I don't like wedges and the upward breakout is unusual. It's a buy signal though.

Answer 2 (target?): Take the height of the wedge, multiply it by 63% (because that's how often this measure rule works) and add it to the breakout price. The top of the wedge is at 10.43, low at 9.62 for a height of 81 cents. Multiply by 63% to get 51 cents and add it to the breakout price of 10.43 to get 10.94.

Answer 3: With low priced stocks, they are more volatile and it's more difficult to place a stop. I would probably use a volatility stop on this one. That places it at 9.75 or 6.8% below the current close. A volatility stop is computed by finding the daily high-low range over the last month and averaging the values, multiplying by 2 and subtracting the result from the current low. It's a way to prevent being stopped out by normal price action.

The stock plummeted in a dead-cat bounce on a lower sales outlook. If you trade stocks long enough, you will probably run across a dead cat bounce. Even if you placed a stop below the bottom of the chart pattern, you would have lost more than that as price opened lower. On 7/28, the stock closed at 11.10 and it opened the following day at 9.25 before closing at 7.95, a close-to-close decline of 28%.

The End.

See Also

 
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