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KONA Falling Wedge Pattern

KONA (Kona Grill Inc) reported a loss of .08c/share today which fell shy of expectations, yet the stock is trading up sharply & challenging the top of this large bullish falling wedge. On watch for a long entry but I'd like to see how the stock trades before considering an official long entry, especially considering how far the stock has stretched today (16%) just to get to the top of the wedge. Unofficial trade idea for now but on watch for an objective or higher probability entry.

KONA daily July 28th

KONA daily July 28th

On a related note, I went through all the charts in the restaurant sector the other day & have found quite a few attractive setups, both long & short, such as KONA & the recently posted DAVE unofficial trade idea (as DAVE should be reporting earnings within the next few weeks).

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Jul 28, 2016 10:19am|Categories: Unofficial Long Ideas|Tags: |4 Comments

4 Comments

  1. Bullman July 29, 2016 2:35 pm at 2:35 pm

    Sorry to ask, if you have already posted this. What is an objective stop, an hourly close below? where its back in the wedge.

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    • rsotc August 1, 2016 10:28 am at 10:28 am

      Bullman – As this was an unofficial trade idea (that in which I don’t have the highest degree of confidence) I didn’t post a suggested stop or profit targets although I will say that a solid move, ideally on a 60 or 120-minute candlestick close back within the wedge & especially below the 12.00ish level would be an objective stop. Keep in mind, though, that the upper trendline on a falling wedge means that the wedge comes in lower & lower prices as each day goes by so best to say a move back inside the wedge soon OR a move below 12.00 (or any other horizontal support level based on you entry price and loss allowance) going forward.

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  2. Gaucho August 3, 2016 8:08 am at 8:08 am

    Hi Randy @rsotc,
    Yesterday KONA went inside the wedge pattern (min:$12.01) but the close was over the wedge ($12.25).
    Which are the signals to observe for long entry?
    Regards

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    • rsotc August 3, 2016 11:15 am at 11:15 am

      Gaucho – The MACD & 13/33ema histogram (60 minute chart) are both above the zero line (bullish) and appear to be turning back up (bullish) which helps to confirm a long entry or add-on a KONA backtests the wedge pattern on the daily timeframe today. An objective stop could be set somewhat below the 11.68ish support level.

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