August 19, 2008
TACT - Nasdaq. TransAct Technologies, Inc has formed a potential Flag Up pattern after a rapid rise in price accompanied by four high volume days. The height of the chart pattern allows one to measure a profit target for the trade, in this case around the 17.75. Coincidentally there is a gap to be filled at around that level so could get interesting. As with any chart pattern, volume must expand again on the breakout to complete the formation.
4 responses to "TACT - Flag Up"
It’s now been a week, and although TACT hasn’t broken out yet, it’s still forming the bull flag very nicely, with contracting volume. This one should be interesting.
Yes still holding. Flags and Pennants unlike Darvas boxes will sometimes start as small and tight formations that instead of breaking out fast, retrace to form a larger Flag or Pennant. Thats why I never pre-empt their breakouts!
Would you call TACT’s 2.2% rise on expanding volume today a breakout? It did penetrate the upper channel line of the flag, but I’m still not sure if it qualifies…
The ideal breakout is a dominant candle closing decisively above resistance on expanded volume, as compared to the average volume traded during the consolidation phase. For example, lets say the average volume traded during the formation of the flag was around 150m, while the flagpole formed on around twice that. I would like to see a similar volume, around 300m to confirm the breakout. Today’s action was indecisive and could hardly be called a breakout. Something thats happening quite often in the current market.
Leave a comment