Sunday, September 18, 2011

Shorty got $LO low low low

I noticed the daily chart of The Lorillard Group and the fact that as it was about to breakout from the ascending triangle and the more aged symmetrical triangle, it formed a mini shooting star, but not amplified enough to have overly bearish connotations. So this post is meant to show that as traders, we must not simply scan daily charts, substituting scanning for the real work that is required to be succesful. As much as I believe in formations, whether it be via patterns or candlestick formations, many times those textbook formation hide how the stock really trades, and how it trades can reveal what it may do in the future. So while Friday's candlestick of $LO shows that a breakout may not be imminent, a look at the intraday timeframe reveals that, indeed, $LO traded quite bullishly and may be ready to breakout.