Study Guide for Come Into My Trading Room - Forex Factory

192 CASE STUDIES
Trade 8: Biovail Corporation BVF—Entry Answer
BVF—Bull Market Punctuated by Sharp Breaks
Chart A8-a
This chart shows a private bull market in BVF. The stock is moving from
the lower left to the upper right corner of the chart while most other
stocks are in the midst of a broad bear market. This uptrend is occasionally
penetrated by sharp downdrafts, which do enough damage in
a few weeks to wipe out the gains of several months.
To a beginner who comes late to the bullish party, each of those
downdrafts can spell disaster. A pro, familiar with the past, is more
likely to view those declines as buying opportunities. He is also likely
to be extra careful with stops, protecting himself from sudden downmoves.
At the right edge of the chart, in area A, BVF has recovered from its
post-September 11 dip. It has cleaned out weak bulls and is ready to
resume its uptrend. The upmove is confirmed by an uptick of weekly
MACD-Histogram, and an upturn of both weekly EMAs.
The daily chart of BVF shows increased downward volatility after the
September 11 trading halt. The stock takes out its July low, but there is
no follow-through to that breakout, which is a bullish sign. Within a
A