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The Importance of the Exit Strategy (Part II)

03 May Posted by in Candle Sticks | Comments
The Importance of the Exit Strategy (Part II)
 

 

After entering the Abbott Labs (ABT) trade on 2/16 @ $46.77 and the May 42 call @ $5.05 we stayed with the trend until the beginning of April.  At that point the call had yielded a great return.  I was looking to exit at the first sign of weakness.  Two confirming signals: Fibonacci extensions and candlestick formations, alerted me to exit on 4/5.  ABT was approaching the 100% Fibonacci extension and a bearish reversal signal, the dark cloud cover appeared.  There are four main candlestick formations I watch for that might signal a bearish reversal:  dark cloud cover, harami, bearish engulfing pattern and a doji.  I took this warnings and exited with a >60% return in less than two months.

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Abbott Labs - Profitable Exit

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