The pattern can used as an opportunity to add to an existing position as it often occurs after a breakout above a cup with handle or other technical pattern.
Head over to TradingView to install the Three Weeks Tight indicator
The 3 weeks tight pattern forms when a stock closes within approximately 1% to 1.5% of the prior week’s close for at least two weeks. The reason for the bullishness is that it indicates that investors who moved the stock upward in price since the breakout are not taking profits, the price is holding steady.
The buy point is just above the area of resistance formed at the highs of the three weeks plus 10 cents. The ten cent addition to the price is to ensure a push through the resistance at the high of the range.Continue reading