Another trade I had on the request line was BUCY. A huge symmetrical triangle breakout that took 5 months to form. As most of you know I hate patterns that take more than about 2 months to form. Beyond that time frame it takes the stock forever to reach it's target and I have a hard time sitting still in trades that take forever. There are better ways to tie up your money, right? Take a look at the chart below...

Based on the pattern that formed from August up until late December, we have a $13 point wide pattern that should come due within the next five months. I passed on this trade for the reasons I mentioned earlier, but I have received many e-mails from students still in it.

The initial breakout was good for about an $8 move ( I am not counting the gap within the pattern), then came the retracement. Pretty good volume in that pullback which meant many traders took profits and were not looking for the longer term price target of $59. In any event, we are getting pretty close to confirming the hammer back on the 9th. If I were in this trade, one thing I would be watching is if the stock shows reluctance to get back to it's prior high. If this is the case, I would be very tempted to sell in the 51-52$ range. So far the candles look very indecisive over the last 5 days, and volume has been trailing off. That has me worried since the market has been somewhat strong. Any other opinions out there?

Jeff - Any thoughts on what the heck happened with BIDU today? Just profit taking??????

John M.

I entered BUCY on Monday with a support bounce and good volume. My target was around 51-52. I got out of the trade today for a few reasons...
1. The stock is not showing any volume support. My thought was the stock was weakening.
2. Also, my rules tell me that if a stock lags for 5 days without a significant move...I exit the position.
I wrote my trading goals for 2007, and the first goal is
"to consistently follow my trading plan and protect my assets."
Since I wrote in my trading plan to exit in 5 days without any significant move, the trade was automatic. I lost only my commission today and was proud that Jeff confirmed my analysis of the low volume. Thanks for your comments on the stock.

Have a great extended weekend!


First of all, congratulations on your new postion. Cream rises to the top! I wanted to say that your posted evaluations of a specific trade such as ADBE or BUCY is invaluable. I would love to see this become a weekly or daily topic. The art if trading is hard to teach but going through an analysis with you is a valuable insight into the nuances of trading that can make the difference between success and failure. Again, thank you for all your efforts. As I gain confidence, I hope to contribute more to the group. Until then, thank you everyone for your input.

Sean M.


Thanks for looking at BUCY. I'm still in it since the breakout and I appreciate your insights. I've learned that if you're going to take a trade you've thoroughly analyzed, you don't exit unless something in your original analysis has changed. For me, this is just a retest. Same with RIMM's triangle retest, but I think you could argue something fundamentally has changed there(anyone who's seen the iPhone knows what I'm talking about).

I also would like to know what happened on BIDU, but my rule of 2 says that I see what happens Tuesday before deciding that the breakout failed.

Have a great weekend everyone!

Hi Jeff-wonder what your thoughts are on COO(cooper companies) Looks like a bull flag on a short term uptrend. the company likes to make big jerky moves, so once the b/o happens it maybe to late.

thanks Greg

Brett - I'm a little late with this comment, but BIDU did trade .80 higher after hours Friday, so there is hope for a recovery tomorrow. If it heads down again, though, I'm out.

John M.


Looks like we're back above support in the premarket. Hopefully we can get the rally back underway.

Post a Comment

About me

  • I'm Option Addict
  • From Saratoga Springs, Utah, United States
  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
My profile

Prescriptions Here!

Other stuff

Blogarama - 
The Blog Directory
Directory of 
Finance/Business Blogs Finance 
blogs Top Blogs Finance Blogs - BlogCatalog Blog Directory