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AOL, Inc - Long
Entry #1 - 19.65-19.45
Entry #2 - 21.48
Stop - 19.25
Target - 24.00

For the past two months,
AOL has been in a down trend making lower highs and lower lows. The result of this price action is the descending wedge outlined by the orange trendlines on the chart above.
Price consolidation within the pattern is far enough along where planning for alternate entry points is reasonable. Deciding which entry to take will ultimately be decided by the strength of the market at the two points designated "Entry #1 and "Entry #2".
Entry #1 is our preferred point to initiate a long position as
ShadowTrader believes that of the two choices it is actually the most conservative. This is true for two reasons. First, it is closer to the stop so our loss potential is smaller and secondly, the risk reward is greater than Entry #2 meaning that we have to take less risk for a greater gain.
Alternatively, if the market is strong early this coming week,
AOL may break out of the descending wedge without coming back down to the point of Entry #1. In this case the second entry point just above the top of the wedge will come into play. An entry here offers a smaller risk reward ratio because the stop is placed at the same point for either entry. Therefore, we would classify Entry #2 as a more aggressive "quickie" type play.
One very important technical aspect of the descending wedge that might be overlooked by some traders is the pattern of volume during the wedge's formation. Volume should be high during the initial selloff within the pattern (magenta oval) but then decline throughout the rest of the wedge. When price breaks out of the top of the descending wedge, volume should surge.
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