web analytics

Chart of the Day: Anti in TWTR?

The “Anti” is a name coined by Linda Raschke (in her excellent book Street Smarts) for a trade that was originally defined by an oscillator pattern—when short term momentum pulls against (hence, “anti”) longer-term momentum, the stage is set for a powerful snap in the direction of the longer-term momentum. It is also possible to trade it as a pure price pattern, without referring to the oscillator at all. TWTR may be setting up an Anti short, which could be entered in several ways (weak close, break under Friday’s low, etc.), all having one thing in common: this is a trade you want to enter when it is moving in your favor. In other words, short with weakness rather than fading strength; if TWTR continues higher, then there would be no entry. The key question here is whether the breakdown has enough momentum to generate at least another downswing and attempt at a selloff, but we must respect the ability of a stock like this to shrug off a hit like that and continue higher. Don’t anticipate; trade what you see, not what you think. If this pattern does trigger, it would project a downswing into the low 50’s. As always, an entry pattern is only one small piece of puzzle; risk management, profit-taking, and discipline probably contribute much more to the longer term success or failure of any trader.

(Coincidentally, this is the pattern we are covering this week in week 6 of my free trading course. Sign up and check it out if you haven’t already.)

AdamHGrimes

Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.
Close Menu