Now that the flag set up I posted last Wednesday has been triggered ,I've outlined some thoughts on trading strategy for readers interested in following its progress.

You can access my discussion on the original set up via the link below

  • The entry shown on the chart follows a break through the top of the trend channel and a clear rejection of the 20 day moving average support (green line). As discussed in last week's post, the entry level assumes that a filter was applied waiting for price to clear the flag resistance line by $10 prior to buying.
  • The profit objective projects the distance of the last steep lift (or flagpole) from the lowest point of the flag formation. The Fibonacci price tool has been used to do this. The black line shows the height of what I have assumed to be the flagpole
  • The initial stop has been set behind the red support line. This provides scope for price to retest back into the body of the triangle before the pin is pulled on the position. As with the entry, a $10 filter has been applied to determine this stop level
  • Stop Loss management.If price retests and the rally resumes, the stop would be moved up behind the lowest point of the retest correction. This strategy also switches to a trailing stop if price hits 61.8% of the distance between the bottom of the flag and the profit target. Once the trailing stop clears the 61.8% level it can be left at that price