BreakOutArtist
Long

HRB Flag Pattern Confirmed, Aiming At Least $36.00 (+10%)

NYSE:HRB   BLOCK H & R INC
Starting from 2013, price has risen sharply, from $19.00 to as high as $32.00.

However from August 2013 to June 2014, price has been consolidating between $26.00 - $32.00, forming a potential flag pattern.

On 11 June 2014, price has broken out of the $26 - $32 consolidation, confirming the flag pattern formation.
This breakout went as high as 33.45, followed by retracement towards $32.00.

We note that there is support buying at $32.00. This indicates that the initial breakout to $33.45 is unlikely to be bull trap/ false breakout and traders are building up long positions around $32.00.

We project that price has finished retracing and is about to continue to rise even higher to complete the Flag Pattern.

Theoretical Price Targets:

a) $36.00 {Height of Consolidation + Breakout Level = (32-28) + 32 = 4+ 32 =36}

b) $44.76 { Height of Flag Pole + Breakout Level = (32-19.24) + 32 = 44.76

c) $40.85 { Elliott Wave 3 = (1.618 x Wave 1) + Breakout = 1.618 x (33.45 - 27.93) + 32.00 = 8.85 + 32= 40.85}

Reasonable Stop Loss: Below $32.00.

Time Limit: The breakout will most likely occur from now until 03 Sep 2014. This idea will not be valid after 03 Sep 2014

Risk: There is still a possibility of a false breakout, which will be defined if price closes below $32.00.

Reference on Flag Pattern:
http://thepatternsite.com/flags.html

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BreakOutArtist
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Idea Update as of 15 Aug 2014:
Price is facing an upcoming test of resistance, at around $33.50.
In order for Price to continue to breakout cleanly towards $36.00, it should close above $33.50 over the next few trading days.

Good Luck and Have a Profitable Day!
Reply
Hi all,

Please take note that this trade idea is no longer valid.
Price has traded below the Support level of $32.00, therefore making the probability of a bullish breakout close to zero for the time being.

Reply
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