Identification Guidelines

The phrase, high, tight flag, is a misnomer as the formation usually does not resemble a flag formation at all. Sometimes prices move up slightly as the flag progresses, such as shown in Figure 22.1, but more often prices spike down briefly a day or two , then return and move downward or horizontally before breaking out and heading up. The formation was popularized by William J. O'Neil in his book, How to Make Money in Stocks McGraw-Hill, 1988 . In his introduction to the formation, he...

Statistics

The tables in this section differ from those given in other chapters because of the uniqueness of this chart pattern. Many of the statistics provided elsewhere do not apply because there is no breakout and no ultimate low or high. Table 33.2 shows general statistics for MMUs. Number of formations. I found 810 MMUs in the stocks I looked at. Since the pattern was so plentiful, I did not search all of the stocks in my database. Instead, I used 500 stocks from mid-1991 to mid-1996 and another 200...

Preface to the First Edition

When I was a little tyke I decided the easiest way to riches was to play the stock market. It was, after all, a level playing field, a negative-sum game with somebody winning and somebody losing. Hint The winner is always the broker. All one had to do to win was pick stocks that went up and avoid stocks that went down. Easy. I kept this in mind when I graduated from Syracuse University with an engineering degree and showed up early for my first professional job. Each morning I cracked open the...