Failing to indicate the continuation of an uptrend

Figure 7-24 is a chart of the investment banking firm The Bear Stearns Companies, Inc. (symbol BSC). A bullish thrusting line pattern develops in an uptrend, but the following day, the low violates the low of the pattern's setup day. Some bullish trading occurs after this violation, but a few days later, a pretty ugly downtrend begins.

If you bought BSC based on that bullish thrusting line and failed to put a stop at the low of the setup day, you lost more than you could bear. A failing trade like that can make even the most grizzled traders want to curl up and hibernate.

Figure 7-24:

The bullish thrusting line failing on a chart of BSC.

Figure 7-24:

The bullish thrusting line failing on a chart of BSC.

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