FAS Cycle Counts

An interesting analysis shows FAS has a regularly repeating performance. Note that Peak 2 happens 16 trading days after peak 1. Peak 3 occurs 18 days after peak 2. If repeated, peak 4 schedules 16-18 days after peak 3, or on May 29 through June 2. It should also achieve a price near 16, or approximately 60% above current prices.

Dip 1 occurred 7 days after Peak 1; Dip 2, 6 days after Peak 2; Dip 3, 5 days after Peak 3. Note also that Dips 2 and 3 are on the same channel line, a line drawn parallel to the line across the Peaks. From this regularity, one may assume that FAS remains on schedule to arrive at Peak 4 on time or maybe even a day early, since Dip 3 was faster than Dips 1 and 2.

From this example, one knows where FAS is and should be with a probability, and also knows where to place stop losses should it not perform as expected. FAS should also experience another slighter dip before ascending to Peak 4, which provides another entry point with a nearby stop loss point. These known points provide one a reward:risk ratio exceeding 3:1, the minimum acceptable.

There is an alternate possibility that Dip 3 is the A leg of an ABC correction, where the C leg will carry FAS below the lower channel line probably to the green 50-day moving average. If so, one's stop loss should take one out at a minimum loss, with an even more advantageous entry point at the 50-day line.