Bulkowski's Southern Peru Copper 2 (PCU) Trading Quiz

What chart patterns can you find? Look for the following (if you find others, great!): diamond top, 2 ascending broadening wedges, descending triangle, inverted and ascending scallop.

The diamond top in November 2003 is actually part of a high, tight flag. Some of the lines drawn by my program are not as I would have drawn them, so assume a perfectly shaped pattern. The chart pattern on the right is a descending triangle. It confirms after price closes above the top trendline. Just before that, marked as A A on the chart, is an unconfirmed Adam & Adam double bottom.

Answer 1 (buy?): Buy because the breakout is upward.

Answer 2 (target?): Measure the height of the triangle from the peak to the horizontal trendline and add it to the breakout price (where price pierces the trendline). Price reaches the target 64% of the time in a bull market, so consider multiplying the height by 64% and then add it to the breakout price. The high is at 55.80, low at 41.26 for a height of 14.54. Sixty-four percent of this is 9.31. Added to the breakout of 46 gives a target of 55.31. The full height target is 60.54.

Answer 3 (stop?): I would draw the bottom trendline higher, make it an internal trendline. If price dropped below the new line then I would sell. That would place the stop at 42.40.