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Technical Picture - New Recovery High

 March 24, 2010 09:38 AM

A mixed start on Tuesday with choppy base building persisting well into the afternoon before a late day run to fresh new 52-wk and recovery highs. Thus Monday's retest of the base was successful and we rally on. The lack of volume implies few bears ie. no short squeezes as the bulls party on.

PRGO opened with a wide gap and immediately took out the ORH. Volume is strong.

Move from 15 min. to 5 minute timeframe to find a suitable entry point. Price consolidated in a narrow range close to 5 EMA so I entered long. Place Fibs. from previous day - late day lows ie. beginning of last leg up - to ORH and target a Trader-X style extension.

As long as the stock continues to carve out higher highs and higher lows, we can be hopeful of further extensions. After exiting the initial trade, we wait to see how price consolidates. Price consolidates in a narrow range on low volume (price/volume contraction ahead of expansion).

Place buy stop order just above the highest point of the consolidation base after two pivots into the base. The third test of the base is the anticipated BO point as depicted on the two trades below.

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