Chart of the Day: Weekly Anti in TWC

[dc]S[/dc]ome of your best trades will come when your patterns (that offer a statistically significant edge) contradict prevailing sentiment. There seems to be a lot of bullish sentiment regarding TWC. I see many bullish tweets, blog posts, and a very well-known stock picking service noted that it was building a base in an article this weekend. (Hint: anytime to want to justify buying a stock that’s kind of going sideways or down, just say it’s “building a base.”) Actually there is a clear pattern in TWC, and it’s the opposite of bullish…

TWC shows a weekly sell Anti pattern: a sharp downthrust followed by a weak rally attempt that now reads more as a consolidation setting up another downthrust than a rally. The way to trade this is to be aggressive in pursuing shorts, especially on a breakdown below any previous support—you could do worse than simply entering on a close below the previous week’s low. Appropriate stops are somewhere above the high of the consolidation, anywhere from 97.00-101.00, depending on your trading plan and how you manage trades like this. The pattern being decisively violated to the upside would invalidate the setup.

This is not a textbook example of an Anti, but, conceptually, it is valid. I cover variations of patterns like this, along with specific trade management plans, in my book, The Art & Science of Technical Analysis. You can also find more about the Anti here, and here.


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.