KWK - ready to short

kermitp · Joined: 25 Jan 2005 Posts: 48

Kwk - appears to be in the perfect place to short once it breaks the trendline. I would expect an upside bounce first then a continuation to the downside. Just because of the 4 dark candles.

tab321 · Joined: 22 Jan 2005 Posts: 368 Location: Texas

KermitP

Thanks for posting the chart. It does look like a nice short in process.

One Question - Is this a rule with Elliot Wave Counting?

A Break below the Wave Three High - Negates the Uptrend

Of course, it looks like you are waiting for confirmation with a break below the trendline but from your notes on the chart, it seems that an Elliot Wave Count Rule is that a break below the Wave Three High is the signal that the uptrend could be broken.

Thanks,

kermitp · Joined: 25 Jan 2005 Posts: 48

I can't say for sure if it is an EW rule. I think it is a guideline in general not just EW. AdvancedGet has a type 2 sell which when the wave 5 completes and the price closes below the DMA 6.4l (redline).

I was makingthe point that if it also broke the trendline that would add more probability to a short trade. I would not enter until we get another close below the DMA6.4L and the trendline.

In this choppy market I think weneed confirmation.

tab321 · Joined: 22 Jan 2005 Posts: 368 Location: Texas

Thanks for the Clarification KermitP

I would agree that a break in the trendline would be good confirmation. And, this is certainly a choppy market for now.

kermitp · Joined: 25 Jan 2005 Posts: 48

WOW! I did say a little rally but 5.8% in one day is not bad. However, it looks like I may have been premature on calling for a short on KWK. I should have looked at the chart closerand I would have seen a re-occurring pattern of multiple down days of closing lower than the open. I hi-lited it on the chart. Today's candle was an Open Marubozu, a strong bullish candle and a $3 spread doesn't hurt either. It also is an "Engulfing" candle but technically not a Bullish Engulfing as the stock is in a longer term uptrend.

Istill think it is a short candidate. Just don't know if it is now. Of course, when it does crash and burn I'll take full credit for calling it first.

Sorry, I trust folks got in on the rally and not the shortside.

tab321 · Joined: 22 Jan 2005 Posts: 368 Location: Texas

KermitP

To catch the series of patterns/pullbacks on the chart above is a good catch. I sure did not notice that repeating pattern either. Today was a nice rally. Of course, you mentioned from the beginning that it would take a break of the trendline to confirm the short. Moreover, energy stocks seem to have a personality of their own.

Thanks for this chart and this pattern that you highlighted so well.