Profiting with Chart Patterns book

Consolidation: Metlife.
In this first example of a Consolidation, you can see that we had a trading range form 
around the price of $48. Price moved back about three or four times before breaking 
through at $47. 
Figure 3-32.
Consolidation Shown on the Chart for Metlife
The width of that Consolidation is approximately midway between the high and low 
from December. You draw your Eighths scale starting with the low point, but instead 
of moving relative to a prior move in the chart, we move through the Consolidation 
so that the Eighths scale is actually centered on the Consolidation with the 4/8 line 
through the middle of the Consolidation. We once again use our Eights scale 
extension and you can see our exit would have been near $43 for a 7.5% gain.

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Chapter 3 Definitions, Structures, & Examples
©
 Nirvana Systems Inc.
3-33
Profiting with Chart Patterns
Consolidation: Sherwin-Williams
This example shows a very well-formed Flag Continuation Consolidation on 
Sherwin- Williams (SHW). To find the 
anchor
for this Consolidation, start with the 
width, which is approximately a month and a half from early September to the 
beginning of October. Go back in the chart and you will find the low point at $220, 
almost precisely. Using the Eights scale I go from high of the range to the low. This 
allows us to stay in through some pull backs but ultimately was stopped out for a 
small gain of 3%.
Figure 3-33.
Consolidation Shown on the Chart for Sherwin-Williams

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Chapter 
3 Definitions, 
Structures, 
& 
Examples
Profiting with Chart Patterns
3-34
nirvanasystems.com