Matt, Can you please share how you determine price targets when
looking at a pattern? I see that MAs are often the obvious target,
but sometimes I can't figure out how you are measuring a pattern.
Thanks!
baker - Price targets are calculated in a variety of ways: as
you comments, major MA's like the 20, 50, and 200 day act as
generic support and resistance ares. Next I look for previous
highs and lows.
Finally for patterns like ascending triangles or H&S
patterns, measure the height of the pattern and add that to the
breakpoint. I always round prices down so that I'm
conservative. Horizontal Rectangles, measure the height and
add to the breakpoint. Falling Wedges and Rising Wedges by
the book are supposed to retrace the whole pattern, however I've
found that you usually get at least a 50% retracement to 61.8%
retrace. For bull flag patterns, by the book you are supposed
to measure the flag pole height and add to the breakpoint, however
that's aggressive and so at first I measure the height of the flag
pattern consolidation itself and add that to the breakpoint.
generally I'm very conservative and also round to whole numbers
like 30 or 31 and to half numbers like 30.5.
Matt, Can you please share
Posted by baker on 21st of Dec 2010 at 09:25 am
Matt, Can you please share how you determine price targets when looking at a pattern? I see that MAs are often the obvious target, but sometimes I can't figure out how you are measuring a pattern. Thanks!
baker - Price targets are
Posted by matt on 21st of Dec 2010 at 09:45 am
baker - Price targets are calculated in a variety of ways: as you comments, major MA's like the 20, 50, and 200 day act as generic support and resistance ares. Next I look for previous highs and lows.
Finally for patterns like ascending triangles or H&S patterns, measure the height of the pattern and add that to the breakpoint. I always round prices down so that I'm conservative. Horizontal Rectangles, measure the height and add to the breakpoint. Falling Wedges and Rising Wedges by the book are supposed to retrace the whole pattern, however I've found that you usually get at least a 50% retracement to 61.8% retrace. For bull flag patterns, by the book you are supposed to measure the flag pole height and add to the breakpoint, however that's aggressive and so at first I measure the height of the flag pattern consolidation itself and add that to the breakpoint.
generally I'm very conservative and also round to whole numbers like 30 or 31 and to half numbers like 30.5.
Price Targets
Posted by winter39 on 21st of Dec 2010 at 09:54 am
This is a very good guide. Much appreciated!
Thank you Matt, much appreciated.
Posted by baker on 21st of Dec 2010 at 09:47 am
Thank you Matt, much appreciated.