suriNotes.com’s Dec. 18, 2017 Chart Patterns & Algo. Trader HAPPY HOLIDAYS A Weekly Publication SALE ●Stocks/Options/Futures ●Commodities/FX ●Daily/Weekly/Monthly Analysis ●Watchlists ●Auto Generated Chart Patterns/Analysis ●Algorithmic Trading Analysis/Results ●Advanced Trading Ideas ●Relative Strength Ranks Trading Dragon Chart Patterns
Chart Patterns & Algorithmic Trader 2017 ALL RIGHTS RESERVED No part of this document may be reproduced or transmitted without the express written consent of the suriNotes.com or Suri Duddella. This document relies on sources and information reasonably believed to be accurate, but neither the author nor publisher guarantees accuracy or completeness. The examples in this document could be considered hypothetical trades. The CFTC warns that: HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. COPYRIGHT © 2017 – suriNotes.com Data & Charts are created by TradeStation Software from TradeStation Securities. Published in the United States of America
Disclaimer: All the material in this document is provided as Educational Material only. NONE of the chart patterns or chart setups or all other material in this document are trade recommendations. Trading is risky. You are 100% responsible for your own trading. Trading is risky. You are 100% responsible for your own trading. suriNotes.com or Suri Duddella, specifically disclaims any and all express and implied warranties. Your trades may entail substantial loss. Nothing in this document should be construed as a recommendation to buy or sell any security or other instrument, or a determination that any trade is suitable for you. Chart Patterns and other material in this document are Auto generated in TradeStation software and we try our best to check for errors and data consistency, but they may still consist of data or algorithmic errors.
Market Quotes "Avoiding mistakes makes people stupid and having to be right makes you obsolete.” - Robert Kiyosaki “The test of success is not what you do when you are on top. Success is how high you bounce when you hit bottom.” - General George S. Patton "Great spirits have always encountered violent opposition from mediocre minds.” - Albert Einstein
Table of Contents US Markets Patterns Gallery Chart Patterns Energy & Oil Stocks Stocks/Futures/Commodities/FX Earnings Next Week/Charts Watch Lists Bullish/Bearish, Relative Strength Key Supp/Resistance/Pivots Charts Gap Charts Weekly Relative Performances ALGORITHMIC TRADER Trading Dragon Chart Patterns Algorithmic Trades Symbols Universe Books/Websites/Software
Chart Links ■Major Market Indexes Trends ■Gold, Silver, Oil and 10 Yr Notes ■TRAN, VIX, DXY, @TY ■@QM Inv. H&S Pattern ■@GC (W) ABC Bullish Pattern ■CBRL AB=CD Pattern ■CMG Parabolic Arc Pattern ■DENN Inv. H&S Pattern ■DIN ABC Bullish Pattern ■DPZ Parabolic Arc Pattern ■MCD ABC Bullish Pattern ■NATH Symm. Triangle Pattern ■PZZA Head & Shoulders Pattern ■$BRTI ABC Bullish Pattern ■AAPL ABC Bullish Pattern ■AVGO Symmetric Triangle Pattern ■BIIB Head and Shoulders Pattern ■COST ABC Bullish Pattern ■CVX Cup & Handle Pattern ■FDX ABC Bullish Pattern ■HD AB=CD Bearish Pattern ■WMT ABC Bullish Pattern ■GOOG Rectangle Channel ■GILD Bear Flag Pattern ■TWTR Double Bottom Pattern ■KORS Bullish Dragon Pattern ■HAIN Parabolic Arc Pattern ■VRX Parabolic Arc Pattern ■PFE ABC Bullish Pattern ■NVDA Parabolic Arc Pattern ■PEP ABC Bullish Pattern ■GS Cup & Handle Pattern 12 13 14 15 16 20 21 22 23 24 25 26 27 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49
■INTC Bull Flag Pattern ■@HO ABC Bullish Pattern ■@RR ABC Bullish Pattern ■@GC (W) ABC Bullish Pattern ■@QM (W) Rectangle Channel ■AUDCAD Falling Wedge Pattern ■AUDCHF ABC Bullish Pattern ■USDJPY (W) ABC Bullish Pattern ■AUDJPY Cup & Handle Pattern ■GBPCAD Double Bottom Pattern ■QM Fib. Zone Pivots ■@ES Gap Chart ■YM Gap Chart ■HDB Rectangle Channel ■DRI ABC Bullish Pattern ■LULU Rectangle Channel Pattern ■FDX ABC Bullish Pattern ■NKE Rectangle Channel ■SONC ABC Bullish Pattern ■DAL Symm. Triangle Pattern 50 54 55 56 57 61 62 63 64 65 69 73 75 79 80 81 82 83 84 85
Major Indexes
Major Indexes Major Indexes %Chg YTD
Chart Patterns & Algorithmic Trader (12) Major Market Indexes Trends All four major market indexes (Weekly) charts are showing strong eSix trends. www.surinotes.com
Chart Patterns & Algorithmic Trader (13) Gold, Silver, Oil and 10 Yr Notes Gold started to weaken in its trend as it trades below 200 MA. Silver and Oil are still way below its 200 MA and Treasury Notes is just above 200 MA. www.surinotes.com
Chart Patterns & Algorithmic Trader (14) TRAN, VIX, DXY, @TY Transportaion Index, VIX, U.S. Dollar Index (Weekly) and eSIX trend indicator. www.surinotes.com
Chart Patterns & Algorithmic Trader (15) @QM Inv. H&S Pattern @QM (D) is forming Cup & Handle Pattern. C&H patterns are valid when price closes above breakout level. Entry above breakout level: 59.575, Handle Low: 55.825, 23.15% below breakout level. T1: 69.59 to 72.31 T2: 80.15 to 85.82 www.surinotes.com
Chart Patterns & Algorithmic Trader (16) @GC (W) ABC Bullish Pattern Reviewed in CPAT 09/18/17 $@GC (W) ABC Bullish Pattern Long Entry above 1207.8, Stop below 1144.1 (63.7), Target1 Zone: 1347 to 1402, Target2 Zone: 1560 to 1675 www.surinotes.com
Restaurant Stocks (YTD%)
Restaurant Stocks PBJ PEJ Food & Beverage ETF Leisure & Entertainment ETF
Chart Patterns & Algorithmic Trader (20) CBRL AB=CD Pattern CBRL (Daily) is trading in bullish AB=CD pattern. Pattern long entry is above $145. Targets: $154 to $157 and $167-174. www.surinotes.com
Chart Patterns & Algorithmic Trader (21) CMG Parabolic Arc Pattern Reviewed in CPAT 09/18/17 $CMG (W) is trading in Parabolic Arc from 01/28/2011 (low: 36.86) to 08/07/2015 (high: 758.61). Parabolic Arc patterns are long-term patterns, but most of the upside parabolic patterns return to at least 50-62% of its prior rise in a correction mode. CMG target range: $199-$311. www.surinotes.com
Chart Patterns & Algorithmic Trader (22) DENN Inv. H&S Pattern DENN (D) is trading in Inv. H&S Pattern (F). Long entry above 12.99, Stop below 12.15 (0.84), Target1 Zone: 14.3 to 14.7, Target2 Zone: 15.7 to 16.4 www.surinotes.com
Chart Patterns & Algorithmic Trader (23) DIN ABC Bullish Pattern $DIN (D) ABC Bullish Pattern Long Entry above 44.17, Stop below 42.04 (-2.13), Target1 Zone: 49.3 to 51.3, Target2 Zone: 57.0 to 61.1 www.surinotes.com
Chart Patterns & Algorithmic Trader (24) DPZ Parabolic Arc Pattern $DPZ (W) is trading in Parabolic Arc from 05/01/2009 (low: -0.39) to 06/30/2017 (high: 221.58). Parabolic Arc patterns are long-term patterns, but most of the upside parabolic patterns return to at least 50-62% of its prior rise in a correction mode. www.surinotes.com
Chart Patterns & Algorithmic Trader (25) MCD ABC Bullish Pattern $MCD (W) ABC Bullish Pattern Long Entry above 114.84, Stop below 110.32 (4.52), Target1 Zone: 137.7 to 145.2, Target2 Zone: 166.6 to 182.2 www.surinotes.com
Chart Patterns & Algorithmic Trader (26) NATH Symm. Triangle Pattern NATH (W) is trading in Symmetric Triangle pattern. Pattern breakout level: $52.01. Targets: $71-76, $91-101, $121-132 www.surinotes.com
Chart Patterns & Algorithmic Trader (27) PZZA Head & Shoulders Pattern Reviewed in CPAT 11/06/17 $PZZA (W) is trading in H&S Pattern. Short entry below 73.77, Stop above 79.48 (-5.72), Target1 Zone: 63.4 to 60.6, Target2 Zone: 52.5 to 46.7 www.surinotes.com
Chart Patterns Stocks/Options/Indexes
Patterns Gallery
Chart Patterns & Algorithmic Trader (31) $BRTI ABC Bullish Pattern Reviewed in CPAT 11/19/17 $BRTI (D, CME Bitcoin Real-Time Idx) ABC Bullish Pattern Long Entry above 3590.26, Stop below 2991.55 (-598.71), Target5 Zone: 16275-17364, Target6 zone: 19386-20475, Target7 zone: 22497-23586 www.surinotes.com
Chart Patterns & Algorithmic Trader (32) AAPL ABC Bullish Pattern Reviewed in CPAT 10/23/17 AAPL (D) ABC Bullish Pattern Long Entry above 152.28, Stop below 149.15 (-3.13), Target1 Zone: 163.2 to 167.0, Target2 Zone: 178.0 to 186.0 www.surinotes.com
Chart Patterns & Algorithmic Trader (33) AVGO Symmetric Triangle Pattern AVGO (W) trading in Symmetric Triangle pattern since June 2016. www.surinotes.com
Chart Patterns & Algorithmic Trader (34) BIIB Head and Shoulders Pattern BIIB (D) is trading in H&S Pattern (F). H&S Patterns are only valid if price closes below Neckline with strong volume signaling breakdown. Short entry below 303.00, Stop above 317.93 (-14.93), Target1 Zone: 274.7 to 267.0, Target2 Zone: 244.8 to 228.7 www.surinotes.com
Chart Patterns & Algorithmic Trader (35) COST ABC Bullish Pattern Reviewed in CPAT 11/20/17 $COST (D) ABC Bullish Pattern Long Entry above 157.25, Stop below 154.10 (3.15), Target1 Zone: 164.8 to 167.7, Target2 Zone: 176.0 to 182.0, Target3 Zone: $193-199 www.surinotes.com
Chart Patterns & Algorithmic Trader (36) CVX Cup & Handle Pattern Reviewed in CPAT 10/23/17 $CVX (D) is trading in Cup & Handle Pattern. Entry above breakout level: 119.00, Handle Low: 112.52, 39.39% below breakout level. T1: 129.2 to 131.9 www.surinotes.com
Chart Patterns & Algorithmic Trader (37) FDX ABC Bullish Pattern Reviewed in CPAT 10/02/17 $FDX (D) ABC Bullish Pattern Long Entry above 218.72, Stop below 214.16 (-4.56), Target1 Zone: 231.6 to 236.4, Target2 Zone: 250.0 to 259.9 www.surinotes.com
Chart Patterns & Algorithmic Trader (38) HD AB=CD Bearish Pattern HD is trading in AB=CD Bearish pattern. AB=CD pattern is completed at 100% AB level from ‘C’ at $186. www.surinotes.com
Chart Patterns & Algorithmic Trader (39) WMT ABC Bullish Pattern Reviewed in CPAT 10/16/17 WMT (W) ABC Bullish Pattern Long Entry above 68.50, Stop below 65.27 (-3.23), Target1 Zone: 77.0 to 80.1, Target2 Zone: 89.3 to 95.9, Target3 Zone: $108-114 www.surinotes.com
Chart Patterns & Algorithmic Trader (40) GOOG Rectangle Channel Reviewed in CPAT 10/16/17 GOOG (Daily) is trading in Rectangle Channel. Channel breakout level: $990. Upper targets: $1034-1078. www.surinotes.com
Chart Patterns & Algorithmic Trader (41) GILD Bear Flag Pattern Reviewed in CPAT 12/11/17 GILD (Daily) is trading in Bear Flag pattern above 200-SMA. If price closes below lower-trend line and 200-SMA, GILD may see further downside. www.surinotes.com
Chart Patterns & Algorithmic Trader (42) TWTR Double Bottom Pattern TWTR (W) is trading in a Rectangle Channel Pattern. TWTR is also trading in Double Bottom pattern. www.surinotes.com
Chart Patterns & Algorithmic Trader (43) KORS Bullish Dragon Pattern KORS (W) is trading in Bullish Dragon pattern. www.surinotes.com
Chart Patterns & Algorithmic Trader (44) HAIN Parabolic Arc Pattern HAIN (W) is trading in Parabolic Arc from 12/30/2011 (low: 5.59) to 08/07/2015 (high: 62.44). Parabolic Arc patterns are long-term patterns, but most of the upside parabolic patterns return to at least 50-62% of its prior rise in a correction mode. www.surinotes.com
Chart Patterns & Algorithmic Trader (45) VRX Parabolic Arc Pattern $VRX (W) is trading in Parabolic Arc from 12/17/2010 (low: 5.65) to 08/07/2015 (high: 263.81). Parabolic Arc patterns are long-term patterns, but most of the upside parabolic patterns return to at least 50-62% of its prior rise in a correction mode. www.surinotes.com
Chart Patterns & Algorithmic Trader (46) PFE ABC Bullish Pattern $PFE (D) ABC Bullish Pattern Long Entry above 34.94, Stop below 34.09 (-0.85), Target1 Zone: 36.9 to 37.6, Target2 Zone: 39.8 to 41.3 www.surinotes.com
Chart Patterns & Algorithmic Trader (47) NVDA Parabolic Arc Pattern Reviewed in CPAT 11/06/17 $NVDA (W) is trading in Parabolic Arc from 11/23/2012 (low: 11.15) to 12/08/2017 (high: 218.67). Parabolic Arc patterns are long-term patterns, but most of the upside parabolic patterns return to at least 50-62% of its prior rise in a correction mode. www.surinotes.com
Chart Patterns & Algorithmic Trader (48) PEP ABC Bullish Pattern Reviewed in CPAT 12/04/17 $PEP (W) ABC Bullish Pattern Long Entry above 109.99, Stop below 106.18 (-3.81), Target1 Zone: 119.1 to 122.6, Target2 Zone: 132.7 to 140.0 www.surinotes.com
Chart Patterns & Algorithmic Trader (49) GS Cup & Handle Pattern Reviewed in CPAT 12/11/17 GS (D) is trading in Cup & Handle Pattern. Entry above breakout level: 255.15, Handle Low: 244.35, 23.72% below breakout level. T1: 283.3 to 290.9 T2: 313.0 to 328.9 www.surinotes.com
Chart Patterns & Algorithmic Trader (50) INTC Bull Flag Pattern INTC (Daily) is trading in Bull Flag pattern. Flag pattern targets: $49-50.65, 52, 55+ www.surinotes.com
Chart Patterns Futures & Commodities
Futures Chg%
Futures Weekly Performance
Chart Patterns & Algorithmic Trader (54) @HO ABC Bullish Pattern @HO (W) ABC Bullish Pattern Long Entry above 1.4578, Stop below 1.3541 (0.1037), Target1 Zone: 1.821 to 1.948, Target2 Zone: 2.314 to 2.579 www.surinotes.com
Chart Patterns & Algorithmic Trader (55) @RR ABC Bullish Pattern Reviewed in CPAT 11/20/17 $@RR (W) ABC Bullish Pattern Long Entry above 12.159, Stop below 11.305 (0.854), Target1 Zone: 13.20 to 13.72, Target2 Zone: 15.20 to 16.27 www.surinotes.com
Chart Patterns & Algorithmic Trader (56) @GC (W) ABC Bullish Pattern Reviewed in CPAT 09/18/17 @GC (W) ABC Bullish Pattern Long Entry above 1207.8, Stop below 1144.1 (-63.7), Target1 Zone: 1347 to 1402, Target2 Zone: 1560 to 1675 www.surinotes.com
Chart Patterns & Algorithmic Trader (57) @QM (W) Rectangle Channel @QM (W) is trading in Rectangle Channel pattern. Watch upper and lower boundaries for potential breakouts. www.surinotes.com
Chart Patterns FX
FX Weekly Performance
FX Chg%
Chart Patterns & Algorithmic Trader (61) AUDCAD Falling Wedge Pattern Reviewed in CPAT 12/11/17 AUDCAD (Daily) is trading in Falling Wedge pattern. Upper trendline breakout level: 0.97500. www.surinotes.com
Chart Patterns & Algorithmic Trader (62) AUDCHF ABC Bullish Pattern $AUDCHF (D) ABC Bullish Pattern Long Entry above 0.74910, Stop below 0.74154 (-0.00756), Target1 Zone: 0.7817 to 0.7926, Target2 Zone: 0.8241 to 0.8468 www.surinotes.com
Chart Patterns & Algorithmic Trader (63) USDJPY (W) ABC Bullish Pattern Reviewed in CPAT 11/20/17 $USDJPY (W) ABC Bullish Pattern Long Entry above 110.290, Stop below 107.311 (-2.979), Target1 Zone: 119.53 to 122.85, Target2 Zone: 132.42 to 139.34 www.surinotes.com
Chart Patterns & Algorithmic Trader (64) AUDJPY Cup & Handle Pattern AUDJPY (D) is trading in Cup & Handle Pattern. Entry above breakout level: 88.171, Handle Low: 84.271, 58.30% below breakout level. T1: 92.30 to 93.43 T2: 96.67 to 99.01 www.surinotes.com
Chart Patterns & Algorithmic Trader (65) GBPCAD Double Bottom Pattern Reviewed in CPAT 10/02/17 $GBPCAD (W) is trading in Double Bottom (Bullish) Pattern. Long Entry is above 1.63029, Stop below 1.58356 (-0.04673), Target1 Zone: 1.7145 to 1.7500, Target2 Zone: 1.8525 to 1.9267 www.surinotes.com
Key Support/Resistance, Pivots
Chart Patterns & Algorithmic Trader ES Fib. Zone Pivots (67) @ES Fib. Zone Pivots www.surinotes.com
Chart Patterns & Algorithmic Trader (68) NQ Fib. Zone Pivots NQ Fib. Zone Pivots www.surinotes.com
Chart Patterns & Algorithmic Trader (69) QM Fib. Zone Pivots QM Fib. Zone Pivots www.surinotes.com
Chart Patterns & Algorithmic Trader (70) GC Fib. Zone Pivots @GC Fib. Zone Pivots www.surinotes.com
Chart Patterns & Algorithmic Trader YM Fib. Zone Pivots (71) YM Fib. Zone Pivots www.surinotes.com
GAP Charts Shows filled and unfilled gap levels
Chart Patterns & Algorithmic Trader @ES Gap Chart (73) @ES Gap chart with filled and unfilled Gaps with at least 1 ATR Gap. www.surinotes.com
Chart Patterns & Algorithmic Trader @NQ Gap Chart (74) @NQ Gap chart with filled and unfilled Gaps with at least 1 ATR Gap. www.surinotes.com
Chart Patterns & Algorithmic Trader YM Gap Chart (75) @YM Gap chart with filled and unfilled Gaps with at least 1 ATR Gap. www.surinotes.com
Earnings Companies releasing earnings in the next few weeks.
December Earnings Calendar
January Earnings Calendar
Chart Patterns & Algorithmic Trader (79) HDB Rectangle Channel HDB (Daily, Earnings: 12/18/17) is trading in Rectangle Channel pattern. Watch channel upper and lower trend lines for potential breakouts. www.surinotes.com
Chart Patterns & Algorithmic Trader (80) DRI ABC Bullish Pattern $DRI (D) ABC Bullish Pattern Long Entry above 80.91, Stop below 79.17 (-1.74), Target1 Zone: 84.9 to 86.5, Target2 Zone: 91.0 to 94.2 www.surinotes.com
Chart Patterns & Algorithmic Trader (81) LULU Rectangle Channel Pattern Reviewed in CPAT 10/16/17 LULU (D) is trading in Rectangle Channel pattern. www.surinotes.com
Chart Patterns & Algorithmic Trader (82) FDX ABC Bullish Pattern Reviewed in CPAT 10/02/17 $FDX (D) ABC Bullish Pattern Long Entry above 218.72, Stop below 214.16 (-4.56), Target1 Zone: 231.6 to 236.4, Target2 Zone: 250.0 to 259.9 www.surinotes.com
Chart Patterns & Algorithmic Trader (83) NKE Rectangle Channel Reviewed in CPAT 09/18/17 NKE (Daily, Earnings: 12/21) is trading in Rectangle Channel pattern. Channel breakout level: $59. Targets: $63-67 www.surinotes.com
Chart Patterns & Algorithmic Trader (84) SONC ABC Bullish Pattern $SONC (D) ABC Bullish Pattern Long Entry above 24.40, Stop below 23.34 (-1.06), Target1 Zone: 26.4 to 27.2, Target2 Zone: 29.6 to 31.3 www.surinotes.com
Chart Patterns & Algorithmic Trader (85) DAL Symm. Triangle Pattern Reviewed in CPAT 10/16/17 DAL (Daily, Earnings: 1/10/18) is trading in Symm. Triangle pattern. Symm. Triangle pattern breakout levels: $54. www.surinotes.com
Weekly Relative Performances
Sector & Indexes Relative Performances Winners: GoldSilver, Defense, Drugs Losers: BioTech, Insurance
Dow 30 Weekly Relative Performance
Select Sectors Weekly Performance
Country ETFs Weekly Performance
Commodity ETFs Weekly Performance
Watch Lists Momentum Relative Strength Bullish/Bearish Lists NH/NL Oversold/Overbought Key Retracements
Sector ETF %DWMY
Relative Strength Ranks (200)
RS Ranks Sorted (Alpha)
Bullish/Bearish List
52 Week Highs and Lows
D%, W%, M%, YTD%
Algorithmic Trading Algo. Techniques Algo. Reports Current Algorithms ALL RETURNS POSTED ON THIS PUBLICATION ARE HYPOTHETICAL PERFORMANCE GENERATED BY COMPUTERIZED SYSTEM AND THEY ARE NOT ACTUAL TRADE REPORTS. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
Trading Dragon Chart Patterns by Suri Duddella The Technical Analysis arena provides plenty of trading opportunities for traders in the form of patterns, cycles, and indicators. Successful pattern recognition and execution must consist of a strong framework and a well designed and tested rule based trading methodology. In this article, I would like to describe one of my favorite chart patterns called ‘Dragon’ with a pattern recognition framework and its trading rules. One of the most powerful and basic pattern in Technical Analysis is ‘Double Top’ or ‘Double Bottom.' Most traders are familiar with the concepts of ‘Double Tops’ and ‘Double Bottoms’ or ‘M-Tops’ and ‘W-Bottoms.’ However, all of these patterns have slight variations in its formations, rules and trading characteristics. Markets rarely transition from bearish mode to bullish mode without going through a series of price action sequences to test support and resistance areas. Major market bottoms or market tops involve a series of turning points (Swing Highs in M-Tops or Swing Lows in W-Bottoms) followed by some congestion before picking a trend or counter-trend direction from prior moves. The Dragon pattern highlights these turning points (Swing Lows and Swing Highs) and provides a rule-based methodology for trading them. Dragon patterns are visible in all-time frames and all market instruments. Dragon Framework The Dragon (Bullish) pattern is similar to the ‘W’ pattern or the ‘Double Bottom’ pattern. Inverse Dragon patterns (Bearish) are similar to ‘M’ pattern. Bullish Dragon patterns usually form at market bottoms, and Bearish Dragon patterns form at the market tops. Dragon patterns work in all time frames and all market instruments. Here I will describe how a 'Bullish Dragon' is developed and traded. The rules for 'Bearish Dragon' are similar but in reverse direction. Like most ‘Double Bottom’ patterns, Dragon patterns present excellent trading opportunities with great risk to reward ratios. The Dragon pattern starts with a ‘Head’ formation as price declines from the swing high level to a swing low to form the first leg of the Dragon. A quick reversal from this swing low (1st leg) on an attempted rally to 38-50% of prior swing forms a key swing high or 'hump' level. Another retracement from hump level forms second swing low (2nd leg). The completion of second swing low signals a potential dragon formation. These two swing lows (legs) usually form within 10-15% of the price difference. The price-action from second swing low should show key reversal bars or a divergence in any momentum based indicators. A spike in volume usually follows in the second leg. Trades are entered after completion of 2nd swing low (2nd leg) and targets are placed in the tail section of the Dragon pattern. How to Trade a Bullish Dragon Pattern Trade Entry A trend line is drawn connecting the head of the Dragon to the middle swing high at hump level. After 2nd leg completion, when price closes above this trend line strong reversal price action or divergence in any momentum based oscillator indicators (like RSI), first trade entry (long) is entered. A more conservative trade long entry (second trade) is entered when price closes above the hump level. Stop: A Stop is placed below the lowest low of two swing lows (legs).
Targets: The first target range for a Bullish Dragon trade is set at 6278% of swing range of head to 1st leg from the second leg level. A second target is set 100% of swing range and the third target range is set at 127-162% of the swing of the head to the 1st leg from the second leg. It may be best to trade these patterns with Trail Stops once price starts to rise towards target ranges. Example The following example shows Bullish Dragon formation in Monsanto (Weekly) MON chart from July 2015 to 2016. Here are some of the key points and how it is traded. MON formed Dragon formation from October 2014 to May 2016. MON formed a swing high to form the head of Dragon pattern (Feb. 2015) In October 2015, MON made swing low to form Leg1 level at 84.27. MON retraced about 43% into the prior swing to form Hump level at 100.62. A second swing low (leg 2) was formed in March 2016. A Trendline is drawn connecting Head and Swing High at Hump level. Price closed above trendline to signal first long entry at 91.30 (April 2016). A Stop was placed below the lowest low of legs. First target is set at 62-79% ($111-119) of head to leg1. Second Long entry was triggered above Hump level ($100.62). The second target level is at $128.5 (100%) of head to leg1. The third target level is at $140-156 (127-162%) of head to leg1.
Examples
PlatoAlgo. Performance Report (12/08/17) Short/Medium Term, Not for Sale or Lease.
Monty Algo. Performance (12/08/2017) Long Term, NOT for Lease or Sale
Symbols Universe
Symbol Universe of Stocks/ETFs
Symbols Universe
Books/Websites/Software
Poster 24” x 36” (100 lb. Gloss Paper) 30 illustrated patterns with Entries, Stops and Targets Pattern Conditions & Trading Rules $19.95 (FREE Shipping in the US) suriNotes.com PATTERNS | PRODUCTS | RESEARCH | BLOG Please send comments and suggestions to suriNotes@gmail.com
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