As of 09/15/2021
  Indus: 34,814 +236.82 +0.7%  
  Trans: 14,420 +134.87 +0.9%  
  Utils: 925 +0.27 +0.0%  
  Nasdaq: 15,162 +123.77 +0.8%  
  S&P 500: 4,481 +37.65 +0.8%  
YTD
 +13.7%  
 +15.3%  
 +7.0%  
 +17.6%  
 +19.3%  
  Targets    Overview: 09/15/2021  
  Up arrow35,600 or 33,800 by 10/01/2021
  Up arrow15,400 or 14,000 by 10/01/2021
  Up arrow965 or 905 by 10/01/2021
  Up arrow15,600 or 14,700 by 10/01/2021
  Up arrow4,650 or 4,350 by 10/01/2021
CPI (updated daily): Arrows on 9/15/21
As of 09/15/2021
  Indus: 34,814 +236.82 +0.7%  
  Trans: 14,420 +134.87 +0.9%  
  Utils: 925 +0.27 +0.0%  
  Nasdaq: 15,162 +123.77 +0.8%  
  S&P 500: 4,481 +37.65 +0.8%  
YTD
 +13.7%  
 +15.3%  
 +7.0%  
 +17.6%  
 +19.3%  
  Targets    Overview: 09/15/2021  
  Up arrow35,600 or 33,800 by 10/01/2021
  Up arrow15,400 or 14,000 by 10/01/2021
  Up arrow965 or 905 by 10/01/2021
  Up arrow15,600 or 14,700 by 10/01/2021
  Up arrow4,650 or 4,350 by 10/01/2021
CPI (updated daily): Arrows on 9/15/21

Bulkowski's Big Lots Trading Quiz

 

Released 7/14/2021.

BLI: Quiz

Below is a slider quiz to test your trading ability. Captions appear below the pictures for guidance, so be sure to scroll down far enough to read them.

 

1 / 4
chart pattern

What chart patterns can you find? Look for the following (if you find others, great!): Big W, head-and-shoulders top, head-and-shoulders bottom, 2 rising wedges, 2 inverted and ascending scallops.

Answers are on the next slide.
2 / 4
chart pattern

The rising wedge (far right on the chart) is usually a bearish chart pattern, so the upward breakout - when price closes above the top trendline - seems unusual. How do you trade it?

Question 1: Do you buy, short, or avoid trading this stock?
Question 2: If trading this one, what is the target price?
Question 3: If trading this one, what is the stop price?
See the next slide for answers.
3 / 4
chart pattern

Answer 1 (buy?): If you look at the bearish rising wedge as a busted pattern (the breakout is usually downward but it's upward in this example), then buy. But first, check for overhead resistance.

The two red lines are what I think are overhead resistance. I drew them by connecting the peaks, valleys, and congestion areas. The lower red line looks to be too close to the breakout to stop price. Breakouts usually push through nearby overhead resistance. Will it stop at the top trendline? That's the danger of trading a chart pattern that is NOT trading at the yearly high. There's always overhead resistance.

Answer 2 (target?): The stock might stall at the top trendline or continue on to the old high at 18 and form a double top.

Answer 3 (stop?): If you were to buy this stock, a stop placed below the lower wedge trendline would work. I show possible locations as points A-D. Point A looks too close. A quick down move would trigger a sale. B isn't much better. C and D seem to be far enough away to lend protection. Volatility is $0.50, meaning a stop place 50 cents below the low at 14.30 would work. The 14.30 value is the most recent intraday low price shown. That means point A is out but anything at B or below will work. On a percentage loss basis, B is at 9%, C is 11%, and D is 14.2%. That's one of the problems with low priced stocks. A meaningful stop loss point is often a high percentage away from the buy price.

The next slide shows what happened to the stock.
4 / 4
chart pattern

Much to my surprise, the lower bar of overhead resistance stopped price on numerous occasions, forming a broadening chart pattern (right-angled and descending). Buying this stock would have been a mistake.

The End.

See Also

 
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My novels:  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Encyclopedia of Candlestick Charts Trading Classic Chart Patterns

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