Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
The chart below is a daily chart for IBM. On this chart I have applied three indicators, the Swing projector, the Pitchfork and the Smoothed Stochastic. We can see these three indicators coming together to indicate there should be a swing top in IBM.
First the Swing Projector is showing the warning symbol for a reversal. This is the red triangle with the “T” inside which indicates the market has met the requirements for an upswing and may form a change in trend at any time.
Second, you can see the price has returned to the Pitchfork Median Line. In the majority of cases, the price will return to the Median Line as seen here.
Third, the Smoothed Stochastic is very high above the overbought level. These three indicators all indicate the price is ready to form a swing down.
Pitchfork and Swing Projector
On the second chart below I have moved the Pitchfork to make a price target for the next swing down. The price should again return to the Median Line. In this case the Median Line is now our price target. This is identified by the arrow on the chart below.
Pitchfork Price Target
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