As of 04/12/2024
  Indus: 37,983 -475.84 -1.2%  
  Trans: 15,498 -250.79 -1.6%  
  Utils: 855 -6.47 -0.8%  
  Nasdaq: 16,175 -267.11 -1.6%  
  S&P 500: 5,123 -75.65 -1.5%  
YTD
 +0.8%  
-2.5%  
-3.0%  
 +7.8%  
 +7.4%  
  Targets    Overview: 04/12/2024  
  Up arrow39,800 or 37,700 by 05/01/2024
  Up arrow16,200 or 15,000 by 05/01/2024
  Up arrow885 or 850 by 05/01/2024
  Up arrow16,700 or 15,800 by 05/01/2024
  Up arrow5,250 or 5,025 by 05/01/2024
As of 04/12/2024
  Indus: 37,983 -475.84 -1.2%  
  Trans: 15,498 -250.79 -1.6%  
  Utils: 855 -6.47 -0.8%  
  Nasdaq: 16,175 -267.11 -1.6%  
  S&P 500: 5,123 -75.65 -1.5%  
YTD
 +0.8%  
-2.5%  
-3.0%  
 +7.8%  
 +7.4%  
  Targets    Overview: 04/12/2024  
  Up arrow39,800 or 37,700 by 05/01/2024
  Up arrow16,200 or 15,000 by 05/01/2024
  Up arrow885 or 850 by 05/01/2024
  Up arrow16,700 or 15,800 by 05/01/2024
  Up arrow5,250 or 5,025 by 05/01/2024

Bulkowski's Stancorp Financial (SFG) Trading Quiz

Released 3/30/2022.

SFG: Quiz

Below is a support and resistance quiz. Captions appear below the pictures for guidance, so be sure to scroll down far enough to read them.


1 / 5
chart pattern

What chart patterns can you find? Look for the following (if you find others, great!): rectangle top, ascending broadening wedge, broadening top or bottom (hard to tell), broadening formation right-angled and ascending, descending triangle, complex head-and-shoulders top.

The answers are on the next slide.
2 / 5
chart pattern

RABFA is a right-angled broadening formation, ascending. Many of these chart patterns (on this chart) are not easy to spot except for the descending triangle. The breakout is downward from it.

Question 1: Do you buy, short, or avoid trading this stock?
Question 2: What is your price target?
Question 3: What is your stop loss price?
Continued on next slide.
3 / 5
chart pattern

Answer 1 (buy?): If I own the stock, I'd sell it, regardless if support is nearby. Price often pierces a support zone and continues tumbling. If you want to short the stock, then look for underlying support to see how far price is likely to go before taking a position.

Answer 2 (target?): Assume a short sale. Compute the height of the triangle from highest high to the horizontal trendline and subtract the result from the value of the horizontal trendline to get a target. Price hits the target 50% of the time, so be conservative in your target. Look for nearby support where price might stall or reverse. Pullbacks also occur 58% of the time (that's a hint). I drew green lines starting from the price peaks to the left of the chart pattern and red lines from the valleys. Where a nest of lines appears, it might indicate support.

Answer 3 (Stop?): A volatility stop is calculated to be 33.14, or 3.9% above the current high based on 2x volatility of 72 cents. That would place the stop just above the congestion area circled in red on the chart. That's what I would use.

The next slide shows how the trade progressed.
4 / 5
chart pattern

Price was scared off by underlying support and moved to the other side of the chart pattern. I can't tell if the stock closed above the top trendline.

Let's assume your short position has been stopped out.

Question: Should you buy the stock now?

The next slide shows the answer.
5 / 5
chart pattern

Price dropped, which is a surprise, but a properly placed stop would keep losses to a minimum. Price did recover and take off, but not in a straight-line run.

The End.

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