Rallies outpacing reactions with TLS ( since head low of $4.70),a classic Dow Theory Medium Term Uptrend is on display. Not only that, a Head & Shoulders bottom (accumulation) pattern is in the making which is yet to be completed. Neckline drawn with the dashed Green resistance line is the hurdle to overcome, which would complete the pattern. Currently, TLS price action is gently trying to stage a breakout in order to complete the pattern. Should we see a completed pattern over the coming weeks, the tentative bullish price objective from it would be approx. $5.70 zone.
Right Shoulder low of $4.88 now becomes the first line of support which must hold on end of week closing basis, followed by the Head Low of $4.70. Why are these two levels important ? To calculate the appropriate position size, as far as I am concerned. For position size calculation as well as Risk/Reward or Reward/Risk, book by Van K. Tharp “Trade Your Way to Financial Freedom” may be a very good educational resource.
On the monthly chart, not shown, we now have a confirmed Monthly bullish Pivot Point at the end of December 2016 which may also be worth noting. So, a bullish monthly pivot point = A Head & Shoulders bottom of the weekly.
Disclosure : Boring stock for me TLS but it is held with medium to long term view, as long as I don’t see a support violation.
Weekly TLS Chart below.
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