I've been trading using TW's methods for about a year and a half, and I by no means consider myself a TW guru. That said, here's my take on Triarc, from a TW perspective.
Personally, I wouldn't touch it. The primary reason is that the stock is not in the lower ranges of the stock's historical price action. The stock closed today @ $26.58. From what I can see, the 10-year high is in the low-$30s. It just doesn't strike me as a stock that is out of favor/ignored. Compare TRY's chart to SAM's; which one looks like a comparative bargain: TRY at current prices, or SAM in early 2001? You may also want to review TW's criteria for entering higher-level consolidations before leaping into this one.
Could it be considered a triangle formation? Sure, but I wouldn't count on achieving TW's target returns, by any stretch of the imagination. Other ideal characteristics for a TW triangle: a formation at least two years in length, and a formation that ends with low volatility/volume (quiet price action). If you're asking if the price will appreciate if it breaks above $27, the answer is that it may; most stocks establishing new 52-week highs do. The question is how far can it run, particularly when overhead resistance and historical highs are close at hand. I have not looked at the fundamentals, so I can't/won't go there.
One of the few stock positions that I have sold at a loss to date is Bairnco (BZ). It looked like a decent triangle formation to me back in January, 2001. That investment was good for only one thing: teaching me not to stretch the formation to fit the criteria. There are other fish in the ocean that look far better from a TW perspective than TRY, believe me. Be patient and be choosy, particularly if you're new to the method.
Just my opinion. Good luck on your trading.
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This is usually the case with any new trader, he does not want to touch a stock if it appears to high. Ted stated that these upper consolidation formations were every bit as potent as the lower ones. Price makes no difference at all. All you need is a good formation. History- this stock shows no splits on Bigcharts back through 1972 so the early pricing is not distorted. So from 1972-1986 there was a 14 year base with prices below $5 then in the next 3 years marked up to $16 on what appears to be distribution in 1989. This was not a large enough rise for a base of at least 14 years and certainly not enough time for a healthy distribution to take place. The following rise from $3-33 in one years time from 92-93 brought very little volume which signals a higher level consolidation and much higher prices. Not too many wanted to sell at $33 after it had been as low as $2-3 the year before. People this is what TW was all about VOLUME and FORMATION. From 1990 to present is a long consolidation triangle with higher yearly bottoms made starting with 1994 low. This is showing support strength of at least 8 years. Ted said that high level consolidations of 6-10 years were very important and were often overlooked by most traders.There is a very strong resistance level at the $28 level. This is the 3rd time in 5 years to approach this level. Markets usually move away from triple resistance levels faster than any other. This also has a flat top ascending triangle which is an extremely powerful and reliable formation. Watch when the brakeout occurs to the upside which will be the $29-30 range. As for the volume this stock has been very quiet and unnoticed for at least the last 12 years. This stock is certainly worthy of consideration and the quieting of price action during the last 6 months warrants close attention. Should this stock make it 3 points beyond it's all time high then that would signal much higher prices. This stocks action is all you should need to convince you that higher prices are indeed in its future. All it needs is a catalyst that you or I are unaware of at this time. The chart is painting this picture beautifully. For all the bottom fishing we do as TedHeads this is a welcome reminder that bases can and do breakout from higher levels. Kudos to the good eye on this one. As always this is just one man's humble opinion. This is not a recommendation to purchase this or any other stock. All decisions should be your own. Officious Out!!!!!!!!!!!!!!!!!!!!!!!!!
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Here's a quote from a post earlier in the forum and a link to the entire thread. This is interesting stuff to me and forms the basis for why I look at the price levels I look at ... what I consider the sweet spot of the markets for the highest gain balanced against longterm durability given that I don't want to place myself in the "weak hands" situation and trade with a stop.
A lower priced stock usually will have a larger percentage rise than a higher priced one. It is impossible to say how much. But a check of the long range charts will prove that a $10 stock can rise 300% far easier than a $50 stock. (page 118)
The formation i see is a long flat top. This is higher level consolidation, not a low base.
Sure there are plenty of stocks that are cheaper, but if the day ever comes where i cannot find stocks breaking out of their low range ,then a stock like TRY may be appealing.
One thing i learned early on is too study ALL charts . That way i can recognize ALL formations, then its a simple matter of categorizing each one.
I am strictly Ted Warren by a monthly chart.
With stocks like TSRI&HMSY (and many, many others)begging to be bought,i will not consider putting money in charts like TRY . But by studying , i learn .
The two cents worth from Sammy So-So
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