Matching Move – Pattern 4
Oftentimes a stock’s price move will be “matched” by a similar price move at a later time.
Matching moves that occur contrary to the underlying trend often setup a low risk entry in the primary direction.
The Standard & Poor’s 500 index made an almost exact matching move. The first leg down (from A to B) totaled 91 points. The second drop (from C to D) was for 94 points.
Broadcom, BRCM, makes a matching move prior to resuming the previous downtrend. The A-to-B move is matching in price from C-to-D. AB = $41, CD = $43.
Here’s Texas Instruments, TXN, making a matching move in price. AB = $9.125, CD = $9.500.
Now here’s something you don’t see all of the time. Qwest Communications made a matching move in price AND time! The rise in price from A to B took the same amount of time as the rise from C to D. When time and price compliment each other, the pattern has an even greater chance of working out.
There you have it, the matching move that sets up the chance to buy the bottom or sell the top. Once you notice the first three points, the A-B-C, then you can project a possible turning point by measuring A-to-B and projecting move from point C.
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