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AGI - Fry-Pan bottom

 
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kermitp



Joined: 25 Jan 2005
Posts: 48

PostPosted: Fri Apr 22, 2005 12:48 pm    Post subject: AGI - Fry-Pan bottom Reply with quote

This came up in last night's live chat as being a "Fry-Pan" bottom. I liked the look so I bought a few shares. Below is the chart showing my price points. Stochastics are high but if I remember correctly Steve says that is okay on this pattern. Green lines are my 3 target points. I always pick 3 target with target #1 being reasonably short term (5- 15 days). Target #2 is 3-6 weeks. Target #3 is longer term which I seldom hold that long and is just in case I get lucky and it takes off. I have a known exit point.

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sir bollinger band width



Joined: 26 Mar 2005
Posts: 22

PostPosted: Sat Apr 23, 2005 6:47 pm    Post subject: I Believe You May Have Violated A Cardinal Rule of Investing Reply with quote

If you bought when during the upper right move up of the frying pan, though it looks more like a sauer you violated a cardinal rule of investing.

Always wait for the breakout. It increases the reliability of the pattern significantly. The breakout here is not until over $12.00.

Failure rates on saucers or frying pans are significant.

Good luck
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kermitp



Joined: 25 Jan 2005
Posts: 48

PostPosted: Sat Apr 23, 2005 7:31 pm    Post subject: Blue line is the entry Reply with quote

On the chart I use a blue line to identify the entry. I actually entered @ 10.92. I suppose we could argue if 11.00 or 12.00 is the breakout. Actually, I think the more correct would be 11.50.

You are absolutely correct I did not wait for the breakout. Thus making it a higher risk trade. That because I am looking at my Advanceget and the Elliott wave counts and projections. The cyan line is the 50 ma @ 10.48 which also happens to be the corrective wave 4 projection if indeed the wave 3 were to be over. Wave 3 is projected to my first target of 12.12. So with all this information I have a fair decree of confidence that is will make or come close to the target. I been wrong before.

My worse case stop is 10.26 so I'm risking 66 cents per share and my max risk is $528 on 800 shares with a Reward to Risk Ratio of 2.0. However, I know that if it shows weakness I will be out before the 10.26 area. Probably 10.40 area.

You referred to it as a saucer. Other call it a rounding bottom and Steve calls it a Fry-pan bottom. If anyone is interested they can find out more at this link.

http//stockcharts.com/education/ChartAnalysis/roundingBottom.html

Thanks for the feedback. I'll certainly remember it on my next play like this one. Can't promise I'll wait for the breakout but it is good advice.

Thanks again
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