Here is a profitable pattern that has been showing up in the market recently.

Monday, July 21, 2008

I have named it the Slanted "W " pattern, but looks like a slanted inverted Head and Shoulders pattern, The trend line is the key feature you want to trade off in this case. The criteria for this set up is market or stock has a defined downtrend line, Then watch for a new low being put in usually with a spike down out of any set channel that has been established. Then we get the reversal trade back into the channel and back up to the trend line. Look for the trade to set up when after testing the overhead downward trend the stock pulls back not more then 50% from bottom spike to trend line test. If you see that we are holding off lows and Stochastics move below 20 and become over sold then the stock is ripe for an entry. You can enter then or on the break of the trend line. Place your stops at risk levels of lower low. This trade was alert last Wednesday and was triggered for 5 points. This is one of my favorite set ups and a low risk high reward entry. Look for more alerts like this in the future.