Bending the rules...eh?

Texas Capital Bancshares $TCBI  is forming a pattern called a 3 weeks tight pattern which is one of the shortest bases around.   It can go one more week which should be called a 4 weeks tight but that's straying from the subject.  The primary condition for this base is that the Friday's closing price be 1% or less than the previous week.  So far this is what has transpired:


07/27/12  $43.83
08/03/12  $43.59  -0.5%
08/10/12  $43.68  0.2%
08/17/12  $44.42  1.7%


You can clearly see that the last week was way more than the ONE percent allowed by that rule.  You can start making excuses that this last Friday was an options expiration day and that the price action can be somewhat erratic, however buyer beware, once you go down this path of justifications.

TCBI has great fundamentals and it recently found support on it's 50 dma just a month ago.  If you're familiar with the O'Neil method of pricing the buy point at 10 cents over the previous 3 weeks high point of $44.60 then $44.70 would be a confirmation .  Taking into account that we are also within 0.3% of this years highs on the $SPX,  you should take a smaller position only if it goes up on high volume past the buy point and stick to your stop loss rules.

TCBI - 3 Weeks Tight