Hope all of you are fully invested in the PM rally and are out of risk capital to deploy into other trades.  If so, you can skip this post.  For those of you that believe diversification is a good thing, please read on.

Below are two potential trades that I am currently stalking.  Both stocks have seen 70% declines from their two year high and both are snaking along in a triangle/flag pattern.  If they break to the upside, they should continue on for a decent size trade.  However, they could also be 4th wave triangles (in Elliottwave terminology) of undetermined degree.  If that is the case, any upside breakout will be quickly reversed and the stocks will fall to new lows to complete the final impulse wave down (at which time they will be an even better opportunity, right?).  Odds on an upside continuation?  Heck if I know!

So how do I plan on trading this?  I will go long on a daily close above the upper trend line and place a hard stop below the lower trend line.  As a trader, I will leave the profit objective open for now, but cut my loss quickly should the trade go against me.

Lastly, trade at your own risk, for educational purposes only, blah, blah, blah….

MU chart

TWTR chart