Wednesday, April 27, 2011

APKT Heads Higher

Some days things just seem to go your way.  Today was one of those days for me.  I had seen a very nice symmetrical triangle set up on APKT two weeks ago. When wave e looked near completion I entered an order to go long above the buy pivot high at 74.00 with a stop at 68.50 and a trailing stop of 10 points.  My target was a little more than 3 ATRs at 84.00.  Things certainly seemed to be working well until last night.

APKT reported earnings after hours and missed the consensus estimate.  Shares traded down to as low as 69+/- in after hours trading.  I assumed I would be stopped out today, but APKT raised its guidance and instead of falling the stock traded sharply higher today.  I pity the poor soul that sold 100 shares at 69.

This kind of reversal suggests my initial target was too conservative, and I now believe that APKT will hit at least 100.  There are a number of leading stocks forming triangles like this right now.  Look through IBD and also run a relative strength screen on mid-cap and small-cap stocks and you will see them popping up.  One example is JOYG, which needs to pull back for a couple of days to complete the triangle and form a lower buy pivot.

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