V.14:6(248-252) The High, Tight Flag by Greg Kuhn

V.14:6(248-252) The High, Tight Flag by Greg Kuhn
Item# \V14\C06\THEHIGH.PDF
Availability: In Stock

Product Description

During a strong trend, a stock will still spend some time in a consolidation period before the next run. Here's a chart pattern that can be found during a consolidation of a strong stock. By Greg Kuhn

In most cases, when a stock skyrockets 40%, 50% or even 60% in just a few weeks, it's considered overextended and prone to a deep correction. This is true especially if the rally - often referred to as a climax run or parabolic spike - occurs at the end of an advance that developed over many months. Sometimes the situations could even be the beginning of an even larger advance, and often, such opportunities are forewarned by a particular chart pattern called the high, tight flag.

The high, tight flag pattern is a rare formation characterized by its occurrence after an advance that takes a stock up approximately 100% to 120% in just four to eight weeks, less in some cases. Following such a run, the stock usually corrects in a tight, sideways pattern lasting anywhere from three to six weeks, retracing no more than 10% to 20% of the advance. Many stocks can rise another 100% or more after the formation. The high, tight flag pattern consolidates an advance that often occurs after a stock has established a substantial base. The stock typically spends time in a well-contained base formation lasting from many months to many years. Then, some important news event usually emerges to lift the stock out of its dormancy - for example, an exceptionally strong earnings surprise or perhaps word that a major investor is taking a large position in the stock.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order