Basic Technical Analysis From The Butcher, page-39

I have posted this in response to a poster on the CTM thread telling me that technical analysis could not have predicted the AUZ Breakout. I am of the opinion that there is nothing that cant be predicted from the charts, however, it is the skill of the chartist to discern whether or not there is some to be had.




let me say, that it might have been hard to spot this taking off like it did, however, there were certainly signals that it was going to happen. Lets start from the left. First we have a flag chart pattern that puts in the top of a cup and handle and sets up the long term support and resistance line from which we need to pay close attention to in the future. I may have set this line low, but hindsight lets you make lots of changes. I probably would have set it a point or two higher, but it still is relevant.

The price action then moves down the first down sloping blue trend line and sets us up for a 1-2-3- turn trade. The website link shows a bearish reversal, however, the pattern also works for bullish reversals.

The golden circles are from wyckoff principles, where every lick on that S/R line makes it more relevant and more important once it is crossed.

The first circle then sets us up for a VERY sloppy cup and handle, and to be honest I wouldnt have picked that pattern as one, but that is how loose these chart patterns can be sometimes. The cup and handle I have defined with the pink freehand lines.

Our final confirmation comes from the absolute smashing of the blue S/R line and because a flag chart pattern was put in, you know there is going to be another move higher.

I saw a similar set up being put in a CTM to be honest and that was why I bought in. Now I am a reluctant long term holder as I wait for another move up to make my profits back.

Any questions?