news hit. The selection of this trade was made purely on the foundation of the principles set in these chapters. FIGURE 8.22 HGSI: Human Genome Sciences, Inc. (Weekly Bars) www.TradeNavigator.com Š 1999–2012. All rights reserved.
As a follow-up in regards to the projected profit objective, study the weekly chart on Gilead Sciences shown in Figure 8.23. The entry was $47.93, as shown at point A, with a stop-loss order placed at 44.54, as indicated at point B. The initial risk was $3.39, or a little over a 7.5 percent loss on the purchase price. The initial profit or reward target was set at a one-to-one level or $3.39 for the life span of its seasonal strength time frame. As the chart shows, the trade was profitable within two weeks or time periods on a weekly chart from the time the trade was entered. Granted, we did take a little heat on the trade, but even as prices moved close to our stop-loss level, notice that the OBV indicator showed a higher low. This observation is important, as many times markets show price weakness, but it is not accompanied by strong volume. Again, this was another setup discovered by using a scanning feature incorporated with the use of seasonal analysis triggered by an HCD confirmed with a bullish OBV pattern as well.