There are dozens if not hundreds of technical patterns available to traders and investors. The question becomes where is your entry point and how do you manage the position. +
Swing Trading Bullish Patterns
Common bullish continuation patterns include flags and pennants. A simple definition of these patterns would be a small pullback or consolidation before the prior move resumes. +
The Pennant pattern is very similar to a symmetrical triangle but the rules are slightly different. The specifics are not that important and getting stuck in the minutia of the technical rules will only slow you down. +
Your money management rules and emotional control will get you to the promised land. +
Here's a question(s) I received from a client about trading this setup on Western Digital Corp (WDC). +
Dave – Just curious about your thoughts on this bull flag set up for a swing trade on WDC. See attached charts – Question – assuming that it breaks out to the up side – long where would you enter?
There were a few extra details to the question...+
- Enter on the break out?
- One tick / penny above the 1st swing high.
- Wait and buy one tick / penny above the high?
- It is an inside bar - put on an OCO order for a break out / fade either way.The inside bar is at the top it the triangle and will probably fall back to the bottom of the triangle before breaking out to the up side.for a downside scalp you would be @ 76.60 down to approx. 74. for 2 $1.50 profit.The upside breakout should yield about 15 points, up to around $95.00
Whoa... There's a lot to unpack here.
With such a detailed question I decided to make a video to go over all the questions and provide a thorough analysis. +
Update: Here's Where WDC is Trading Now...
Nearly two weeks later WDC is has pulled back and even faked out some traders with a breakdown that failed. Followed by a strong push back up and through the top of the pennant for a strong breakout. +
Traders that were trapped short on the failed breakdown helped fuel the strong push as they were forced to cover. +