typically, most setups posted here are either categorized as a long setup or a short setup. however, i will occasionally post a pattern that could go either way, such as a symmetrical triangle pattern. in the case of OMX, this one is a bit more complex. OMX plunged from about $19 in early 2011 all the way to just below $4 last october. from there the stock consolidated, finally breaking out of a very solid, well defined base this august. OMX made a text-book successful re-test of that basing pattern following the breakout and never looked back. after a near vertical rip, OMX has since been consolidating over the last month or so in another text-book looking pattern…. a bull-flag.
as the site has been top-heavy on short trade ideas recently, i am going to try to post some of the better looking long-side trade ideas that i find looking thru the charts. i believe that from a pure technical (charting) perspective, OMX fits that bill. therefore, for anyone seeking long-side trade ideas, consider entering OMX on a break above the bull-flag pattern. however, my preference would be to take a 1/2 size position on that breakout, only adding the second half if & when that key horizontal resistance around the 8.26 area is taken out.
for more active traders and those who share my longer-term bearish outlook on the market, my preferred scenario would be a breakout of this bull-flag pattern, which could trigger a quick long-side trade up to that resistance level, then reverse the trade (from long to short) as that breakout will most likely prove to be a bull-trap ASSUMING the broad market continues to play out as i have been discussing lately. it is possible that if the selling begins to accelerate soon, then this pattern could break to the downside or fail immediately after breaking out. i will try to update this trade as/if it play out, especially if i take it personally. as always, feel free to contact me if you would like any updates or have questions on any of the trade ideas posted here.
i am adding OMX as a long setup now with an entry to be triggered on a break above the bull-flag (approximately a move over 7.62 if it were to breakout early this week). the first target is 8.25 and T2 is 12.15. depending on how the broad markets look at the time T1 is hit (assuming it is), i might reverse the trade and add OMX as a short-trade idea. T1 would be about a 12.5% gain if hit.