LLTC - 120105; 15-minute chart at 2005-12-04 19:51:27
This trade is a little out of the "norm" as I usually take set-ups at support with a target around the Fibonacci extension. But LLTC was too good to pass up!
1.) What did I see? A gap up and strong first five bars. Note how the third, fourth, and fifth bars narrow in range, and the fifth bar forms a nice hammer*. 2.) What is the entry? A break of the fifth bar high. 3.) What is the exit? The position was closed at the end of the day.
Notes - when you have a stock that pushes strongly through the Fibonacci extension, it has a good possibility of a continued rally. LLTC is a textbook example.
*most of you know, but it is worth repeating - for me, a hammer does not have to occur ONLY at a bottom. Valid hammers represent strength after an attempt to push lower, and in my experience they can be great set-ups at numerous points in a price move.
