a possible scenario for you consideration, page-6

Hi Sharks37,

Sorry for not getting back to you earlier. That's a fair question you ask in relation to my post 4875428 at 13:39 today.

When drawing pitchforks, what I am always trying to identify is which of the possible forks I could draw best contains/describes price movement by adding an overall context. I look for certain things that give me confidence that the pitchfork I have chosen is the best fit. These indicators are things such as;
* whether or not price has gapped up or down across the median line during a strong move,
* whether or not price has gapped up or down across the outer tynes during a strong moves outside the original pitchfork to touch an existing, sliding parallel line,
* the number of exact touches that the price makes on the median line as well as the upper and lower tynes, in terms of tests and retests,
* whether or not there are obvious internal support and resistance lines within the pitchfork (usually on Fibonacci ratios) to which price movement confirms fairly accurately,
* and one or two other, lesser indicators.

If you draw a number of possible pitchforks, there will always be one that leaps out at you as being more accurate and a better fit than the rest. I quite often exchange charts with Totterdell91 on stocks of mutual interest and it surprising how often we have small variations in the way we have each drawn our pitchforks, but yet the overall deductions and assessments are surprisingly consistent. We may vary a cent or two on deduced target prices as a result. It's one of those things that you get better at the more you do it. After a while you just 'see' pitchforks without necessarily drawing all the various options first.

It is also common to draw pitchforks within pitchforks, each representing a different timeframe, e.g. a long term pitchfork that sets the overall direction, containing an intermediate term decline in price perhaps, then a shorter term / more recent recovery and upwards movement. Each is valid, although I always re-assess and if necessary re-draw pitchforks in the light of more recent price movements. This becomes a process of ongoing adjustment to retain the best fit and provide the best and most accurate context for price movement.

I use pitchforks more to identify logical entry and exit points and where to locate stops, rather than try to predict future price movements to far ahead, on most occasions.

I have attached a new chart which contains my original green pitchfork (now lighter and marked as Pitchfork B), plus a new blue pitchfork (in heavier lines and marked as Pitchfork A) which is my interpretation of the one you suggested. I hope I have done that correctly. I have also added an external sliding parallel line (blue) to yours and an internal support/resistance line at the 0.618 Fibonacci level which receives a number of touches from the price action, i.e. test and retests. With these lines added, your suggested pitchfork is a good solution that provdes an accurate description of price movement.

My green pitchfork is based on a shorter timeframe and more recent action, following my intermediate (red pitchfork) and the earlier blue (mid-term) pitchfork in my earlier post.

I think the thing to note is that the deductions you would draw from your solution and those from mine would be largely the same although reached via different avenues. That is not uncommon. As I said earlier, Totterdell91 and I find this quite often. Once again, the size of the repeating ranges would tend to identify the same target price the same way for each of us and each of our solutions would give confidence that the most likely price path was upwards, for reasons we could explain logically to ourselves and others.

Thanks for the question!

Regards,
Bones