Earlier I mentioned about a HTF which is a high tight flag for those that don't know. It is one of the most reliable chart patterns, but like all patterns only works a certain percentage of the time..
This from Thomas Bulkowski's book the Encyclopedia of Chart Patterns ...
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwibo8m1q8HwAhXbyjgGHe4iB9gQFjAPegQIFRAD&url=http://1.droppdf.com/files/hKUvF/encyclopedia-of-chart-patterns.pdf&usg=AOvVaw0V5npCudlpumMkmclKROsfPg 652 "
Briefly, O’Neil looked for a doubling of the stock price in less than 2 months, a sideways move of 3 to 5 weeks during creation of the flag with price drifting down no more than 20% in the flag. The guidelines eliminated many patterns so that fewer than 10% qualified. I followed none of them. I programmed my computer to identify all stocks that had a minimum price rise of 100% in 2 months or less. Then I manually went through each stock and looked for a nearby consolidation region. If the region was close to the 100% price gain, then I accepted it as a high, tight flag."
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The average rise in a bull market is 69% and patterns in both bull and bear markets have 0% break-even failure rates. Yes, they do fail, but just 5 out of 307 failed to climb at least 10%, and none failed to climb at least 5%. That is an excellent start for any chart pattern."
Moving on to Firefinch, we have had just over a 100% move since March 5th to April 30th, just less than 2 months. We have been going sideways since then in a fairly narrow movement (until today's
@Mattminton79 sell off) of only 10-15%, which means huge support for these higher prices.
A break at 39-40c should see a fast rise over a few weeks at most to a high price before a sell off. This technical pattern just lines up with the fundamentals perfectly, we are expecting news of the lithium de-merger soon. This appears to be one of those times when both the TA and FA lines up, which is good enough for me.
Current chart from bigcharts ...
https://bigcharts.marketwatch.com/q...insttype=&freq=1&show=True&time=6I've been using TA for over 30 years and have over 100 TA books on all types of mostly junk analysis. What I've learned is that most TA only works some of the time, statistics from the past change, patterns get 'printed' by institutions these days to catch 'chartists' out (by selling into buy stops of a break up from a popular chart pattern for example). Please do your own research and statistics into the potential, always ask those with technical 'certainties'
what the statistics on their analysis show. I've had around 75% success rate with HTFs with moves of 25%+, however very few have had matched FA supporting them.
We DO NOT yet have a HTF as the price has NOT broken above that 39-40c area. So in reality this might not end up being a HTF!! This is currently just a possibility.
What I do is different to the TA in Bulkowski's book, buying near the bottom of the HTF, it is more risky but usually has a lower stop loss level (except when there is a huge gap down etc). I have found the move upwards of successful HTFs can be very swift, that means buying well into the move even with a buy stop, usually a gap so risk becomes greater compared to reward.
Remember this is NOT a recommendation, I'm just sharing my thoughts on the possible technical setup.
(and I came out of hospital today after another back procedure)
