What We're Reading

Diamond Top In Small Caps

Posted by StockBuz on January 29, 2015 at 10:03am in Technicals and Useful Tools

As discussed yesterday in Chat, small caps appear to be forming a diamond which can represent a "top" or merely taking a rest or consolidation before resuming it's trek higher.

Theory is to trade the direction of the break higher or lower. IWM would work for a bullish breakout and TWM for a bearish break down for those who are unable to short.

fwiw we recently traded TWM on market weakness. Looks as though it may be setting up again.

For more information on diamonds, I would suggest you browse through Thomas Bulkowski's pages at ThePatternSite.

For a technical analysis trader or investor, you need to be able to properly identify stock patterns his book Encyclopedia of Stock Patterns is a must have.

stock patterns, small cap stocks, rut, iwm, twm, book on stock trading, technical analysis

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