As of 02/23/2024
  Indus: 39,132 +62.42 +0.2%  
  Trans: 15,921 +98.65 +0.6%  
  Utils: 849 +3.14 +0.4%  
  Nasdaq: 15,997 -44.80 -0.3%  
  S&P 500: 5,089 +1.77 +0.0%  
YTD
 +3.8%  
 +0.1%  
-3.7%  
 +6.6%  
 +6.7%  
  Targets    Overview: 02/13/2024  
  Down arrow37,700 or 39,000 by 03/15/2024
  Up arrow16,400 or 15,400 by 03/01/2024
  Up arrow870 or 800 by 03/01/2024
  Down arrow15,000 or 16,400 by 03/15/2024
  Down arrow4,850 or 5,100 by 03/15/2024
As of 02/23/2024
  Indus: 39,132 +62.42 +0.2%  
  Trans: 15,921 +98.65 +0.6%  
  Utils: 849 +3.14 +0.4%  
  Nasdaq: 15,997 -44.80 -0.3%  
  S&P 500: 5,089 +1.77 +0.0%  
YTD
 +3.8%  
 +0.1%  
-3.7%  
 +6.6%  
 +6.7%  
  Targets    Overview: 02/13/2024  
  Down arrow37,700 or 39,000 by 03/15/2024
  Up arrow16,400 or 15,400 by 03/01/2024
  Up arrow870 or 800 by 03/01/2024
  Down arrow15,000 or 16,400 by 03/15/2024
  Down arrow4,850 or 5,100 by 03/15/2024

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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