Tuesday, January 22, 2008

MGM Short Entry or Long Exit

When TD Sequentials are completed, a break below their stop loss points are usually a very bad sign. One thing that I have observed (and posted about) is that a retest of the breakdown point usually follows, giving one a second chance to get out. The retest can also give one a chance to get short that equity.

One of my favorite things to do in technical analysis is to use several techniques to arrive at the same conclusion. As the charts of MGM show, both a retest of the TD Sequential breakdown and a return to confluence lines up at almost the exact same place. (see previous post on confluence)

If we bounce back up to the 80 price point, use 84 as a stop loss for a short entry.

No comments: