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 Southwest Airlines (LUV) Trading Quiz

 

Released 11/30/2021.

LUV: 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!): Adam & Adam double bottom, head-and-shoulders top, large descending triangle, symmetrical triangle.

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

Price dropped below the large descending triangle in September 2005. When price climbed above the top trendline, it was a buy signal.

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?): Buy. This type of fake downward breakout could signal the start of a strong uptrend.

Answer 2 (target?): You could use the height of the large triangle to compute the target but that would give you a huge and probably unrealistic estimate. Instead, I would use overhead resistance from the weekly chart (not shown). From the prior daily chart, it looks like 15.50 to 16.25 will cause problems for the stock. That's the Nov 2004 to January sideways move. You can see a part of it on the left of this chart.

Answer 3 (stop?): From the September low, because price has climbed far to pierce the blue trendline, using the bottom of the triangle would mean a large loss. 2x volatility is just 68 cents, suggesting a stop no closer than 13.80 would work well. That corresponds to the congestion region I have circled in red. That's where I'd place my stop, perhaps just below this.

As you can see, price continued to move up after the throwback attempt. It exceeded the target price and reached a high of 17.90.

The End.

See Also

 
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