Profiting with Chart Patterns book

Consolidation: Western Union.
The next example shows a Symmetrical Triangle Consolidation on Western Union 
(WU). Again, same rules—you take the width of the Consolidation and move to the 
left of the chart to find the high point, then draw the Eighths tool going to the cross of 
the triangle 
Figure 3-34.
Consolidation Shown on the Chart for Unocal
Using our Eights scale extension we find our target at $16. In this example, the chart 
ran in to another consolidation pattern later in January, but I think we can all agree 
that making a 5.8% gain in a half a month is very good. We do not need to make huge 
moves. 

---

Chapter 3 Definitions, Structures, & Examples
©
 Nirvana Systems Inc.
3-35
Profiting with Chart Patterns
Consolidation: Charles Schwab
In this chart of Charles Schwab (SCHW) we see a nice Broadening Continuation. As 
we see price break through the lower range of this consolidation pattern we quickly 
locate the prior high and low for our Eights scale. Price quickly reaches the lower 
boundaries without closing our position so we once again use the Eights scale 
extension where we get an exit around $24 for a fast 23% gain.
Figure 3-35.
Consolidation Shown on the Chart for Charles Schwab

---

Chapter 
3 Definitions, 
Structures, 
& 
Examples
Profiting with Chart Patterns
3-36
nirvanasystems.com
Profit-Taking Rule
This section discusses the Profit-Taking Rule. Here we have an broadening bottom 
pennant triangle formed in Sysco (SYY), which is a average-priced stock and also a 
fairly volatile stock, as you can see from this chart. As we push up through the top of 
our consolidation, the price chart crossed 6 of our Eighths tool lines in 4 bars. Then 
we Sysco started moving back down with in a few bars.. Whenever we cross three 
Eighths lines in rapidly in just a few sessions, we usually should just go ahead and 
take profits. 
Figure 3-36.
Profit-Taking Rule Shown on the Chart for Sysco
Generally speaking, when you see a big sudden move after you take a position, that 
is a windfall profit, and it is a good idea to go ahead and take that profit.

---

Chapter 3 Definitions, Structures, & Examples
©
 Nirvana Systems Inc.
3-37
Profiting with Chart Patterns