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www.guerillastocktrading.com The Hook Punch is a stock chart pattern label I’ve created. This pattern is usually seen following a significant downwards move. What goes on is that after having a big downward move, the stock goes into a downtrend channel. After generally 2 to 3 bounces against the downtrend channel wall, the stock does a breakout move. After having a short rally, the stock then does a 38.2% to 50% Fibonacci retracement. It might begin an uptrend channel. The pattern resembles a giant hook with the punch being the breakout from the downtrend channel. Traders can enter a long on the downtrend channel breakout, or even a good bounce off a 38.2% to 50% retracement. There may be more variation in this pattern than of all stock chart patterns I have seen and that’s why more traders haven’t seen this before and I’m left to invent the pattern myself. Due to this high variation, it is vital that you understand the mindset behind the pattern so you’re able to filter out the distractions.
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