Based on historical movement, the trough could occur anywhere in the larger red box. The final targets are in the green boxes. The pending top should occur within the larger green box as has been the historical case. Half of all movement has ended in the smaller green box. In this instance, the signal indicated BUY on September 9, 2021 with a closing price of 73.0.
If this instance is successful, that means the stock should rise to at least 73.65 which is the bottom of the larger green box. Three-quarters of all successful signals have the stock rise 3.444% from the signal closing price. This percentage is the bottom of the smaller green box. Half of all successful signals have the stock rise 5.3515% which is the end point of the black dotted arrow. One-quarter of all successful signals have the stock rise 9.7635% from the signal closing price which is the top of the smaller green box. The maximum rise on record would see a move to the top of the larger green box. These are the same concepts for the levels in the red boxes as well.
The ends/vertical sides of the boxes are determined in a similar fashion. The peak of the rise can occur as soon as the next trading bar after signal close, while the max rise occurs within the limit of study at 40 trading bars after the signal. A 0.75% rise must occur over the next 40 trading bars in order to be considered a success. Three-quarters of successful movement occur after at least 12.5 trading bars; half occur within 25.5 trading bars, and one-quarter require at least 35.5 trading bars.
The black dotted arrow represents median historical movement. Medians are a good metric, but they are just one of many I use when forecasting future movement.
As always, the stock could decline the very next bar after the signal without looking back (therefore the red boxes would not come into play) or the stock may never decline (and the green boxes may never come into play).
hey , it must close at 73.18 to better entry ,I understand correctly ??
im a little new ,
thanks
StockSignaler
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@avi417, not sure if I fully understand your question, but I will give it a try. Based on historical data, the stock normally moves down after the signal with a bottom somewhere in the larger red box. 50% of the time the bottom appears in the smaller red box. It is very rare but the stock may never drop down into the red box and it could head up straight after the BUY signal. The stock signaled a BUY at the open on September 9. When I wrote this article the stock had already moved down into the smaller red reversal box where the bottom could occur. At the time of my reply to you the stock has dropped below and beyond the smaller red box. There are basically two things which can happen at this point. 1) The stock never moves up into either of the green boxes (always possible, but so far the stock has always moved up even if slightly into the larger green box). 2) The stock indeed moves up into the larger green box and eventually the smaller green box. The lowest price of the bottom green box is 73.65. This is normally my conservative target top. If that move occurs today from the closing price of 69.73, this would require the stock to gain 5.6% in about 2 weeks. This is possible with market volatility being what it is. Half of all historical movement could see the stock move up to 76.80 within the next 2 weeks. Historical data is obviously not a guarantor of future behavior. I hope this helped.
im a little new ,
thanks