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About a week ago, I showed a chart of AGP that was a potential swing setup- it was oversold and throwing off bottoming hammers. Yesterday we got the first “higher high” since that post, and it turned into a nice short-term trade entry:

With the bottom of Friday’s hammer as a stop, that’s about a 3R (300% of initial risk) gain in 2 days. In other words a thousand shares at $24,600 would be up about $1800, or over 7% total, in those 2 days.

A more aggressive way to play these is to set the entry bar’s bottom as the initial stop, then size your position accordingly. That would result in an entry of 24.60 with an initial stop of 24.30, or an “R” of 30 cents. Sizing using that method would have you up over 6R in the ensuing 2 days.

Do We Have a 2b Top On QQQQ?

Vic Sperandeo coined the term “2b Top” to describe a classic double-top, but where the second high momentarily spikes above the first one. Check out the Qs:

An aggressive short can be taken upon the failure back below the first high, whereas a more conservative trade would be to enter at the break of the near-term low between the two highs.

This method also allows for an initial stop at the second high. Personally I’d be inclined to set my stop a little below the second high, because if this pattern plays out, the second high should never be revisited during the trade.