As of 08/05/2022
  Indus: 32,803 +76.65 +0.2%  
  Trans: 14,601 +122.31 +0.8%  
  Utils: 1,014 -7.66 -0.7%  
  Nasdaq: 12,658 -63.03 -0.5%  
  S&P 500: 4,145 -6.75 -0.2%  
YTD
-9.7%  
-11.4%  
 +3.4%  
-19.1%  
-13.0%  
  Targets    Overview: 07/28/2022  
  Up arrow33,300 or 31,400 by 08/15/2022
  Up arrow15,200 or 13,400 by 08/15/2022
  Up arrow1,040 or 975 by 08/15/2022
  Up arrow12,900 or 11,300 by 08/15/2022
  Up arrow4,200 or 3,900 by 08/15/2022
CPI (updated daily): Arrows on 7/15/22
As of 08/05/2022
  Indus: 32,803 +76.65 +0.2%  
  Trans: 14,601 +122.31 +0.8%  
  Utils: 1,014 -7.66 -0.7%  
  Nasdaq: 12,658 -63.03 -0.5%  
  S&P 500: 4,145 -6.75 -0.2%  
YTD
-9.7%  
-11.4%  
 +3.4%  
-19.1%  
-13.0%  
  Targets    Overview: 07/28/2022  
  Up arrow33,300 or 31,400 by 08/15/2022
  Up arrow15,200 or 13,400 by 08/15/2022
  Up arrow1,040 or 975 by 08/15/2022
  Up arrow12,900 or 11,300 by 08/15/2022
  Up arrow4,200 or 3,900 by 08/15/2022
CPI (updated daily): Arrows on 7/15/22

Bulkowski's Teco Energy (TE) Quiz

Released 8/5/2022.

TE: Quiz

Captions appear below the pictures for guidance, so be sure to scroll down far enough to read them.


1 / 4
chart pattern

Look for the following chart patterns (If you find others, great!): 2 right-angled and ascending broadening formations, symmetrical triangle, descending triangle>, rising wedge, broadening top.

The answers are on the next slide.
2 / 4
chart pattern

Price has broken out downward from the descending triangle by closing below the lower trendline.

Question 1: Do you buy, short, or avoid trading this stock?

Question 2: If trading this one, what is the target price?

Question 3: If trading this one, what is the stop price?

The answers appear on the next slide.
3 / 4
chart pattern

Answer 1 (buy?): Sell an existing holding or short the stock (because of the downward breakout from the triangle).

Answer 2 (target?): Measure the height of the triangle from highest high to the horizontal trendline and subtract the result from the bottom trendline. Here are the numbers: 19.30 (H) – 18.73 (L) = 0.57. 18.73 – 0.57 = 18.16. Clearly, this is a small descending triangle, suggesting a meager decline.

Will price drop to 18.16 and then recover? To answer that, let's find nearby support. I show what I think is the support zone in blue, well below the chart pattern. Even though the chart pattern is small the potential for a large decline is high (because of the absence of support). The circle in green shows congestion that might slow a price decline.

Answer 3 (stop?): If selling short, what is the stop price? Volatility is 52 cents. I measure that by computing the daily high-low price range over the last month and then multiplying by 2. Adding this to the intraday high price gives a stop price of 19.33 or 3.9% above the close. That's just above the chart pattern's high and it's a good location. A volatility stop helps prevent the trade from being stopped out on normal price fluctuation.

The next slide shows what happened.
4 / 4
chart pattern

Price drops in an unsteady manner, finding support sooner than I thought, between 17 and 18 (area in red, an ascending broadening wedge). The complex head-and-shoulders bottom lifts price in the support zone I identified in the prior chart.

The End.

See Also

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