lowtrade

[lowtrade]

What to talk a little more about GORO chart and why I played it low risk. When the flag pattern did breakout.

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With TA & charting, many times mid term charts morph into short term charts and I've always taught play the short term first, mid term next.

I'm going back on that here. The rising wedge is causing me concern, because volumes basically were stable in each price step up and down. This worries me as to the conviction retail has. With a mid term negative phycology but positive short term sentiment. Investors use phycology and swing traders use sentiment.

See the logic, stable volumes in large moves, say investors. Thus longer term patterns should take priority, over short term swing trader patterns.

The rising wedge pattern is a reversal pattern, which you normally see working, if the peak is walked out of. To defeat any mid term pattern (cause it to fail), you want to see conviction in volumes.

SO while the flag (which actually is more successful then a wedge) calls for $6.00 target. I wasn't confident it would break upper trend.

It's been a while since I spent time teaching or discussing TA & charts and felt some could glean something from this post. When charting, try to take ALL factors into account when evaluation takes place. And use TA to support your eval. TA is supporting continuation also. But Volume, a very important factor is dull. And dull always creates concern for me. Dull volume in large price swing charts means long term investors and short term charts need swing traders. I don't see them.

So when I made my chart and planned my play. I took volume into mind and as always took the low risk, conservative outlook. It cost me nothing and if trend is broken with convection, I can always add larger.