Climatic Low

Trading Strategy: Climatic Low. PGR fell a distance from its 20-ma last week that suggests it's likely ready for a tradable rebound. Then the daily range expanded considerably wider than the prior trading sessions and volume became climatic. This also suggests a short-term reversal is close. Next day was the day that now tells us the turn is at hand as PGR closed above its opening price for the first time in eight trading sessions and held above the prior day's low.

chart courtesy of

Tip: Daily price range expansion after a several bar decline suggest a reversal is most likely close at hand. When its pattern is accompanied by expanding volume it increases that likelihood. This combination of price and volume action suggests a capitulation to the selling pressure and a tradable reversal after a Change of Guards (COG).

The Play: Buy once it trades above previous trading day's high ($47.17). Once entered, stop will be placed below the low made on previous day.

Objective: A move of 1.50- 2.00 There is a small base of resistance in the 48.50 area that can been seen on the intra-day chart. A reaction there is likely. The significant resistance area is higher in the 49.50 area. Take it a step at a time and monitor along the way. Entering is the easy part. MEDIUM RISK

Play Review:

PGR went up almost $2.00 dollars from entry, the objective has been hit. That said PGR looked like it can move higher if the market does not fall apart.