How To Trade A Rocket Using the Square of 9

Markets often play out in threes — 3 drives to a high or a low, Head & Shoulders patterns, Cup & Handles, Rule of 4 Breakouts (breakouts over triple tops).

The following XPEV daily shows a 3 bagger in this Chinese EV play from the beginning of November in the scope of 3 drives from 20 to the 60 region.

Notice also the 3 Breakaway Gaps.

Buying a breakout is easy. When to get out, to sell, is an art.

Let’s see how the Square of 9 Wheel does a good job of mapping a rocket’s trajectory.

XPEV IPO’d on August 27 and traded down to strike a low at 17 in September.

It triggered a Rule of 4 Breakout on November 4, exploding over 24.

From the 17 low (green), two full squares of 360 degrees up is 65 (red).

Notice that 1 square up (or 360 degrees) is 37.

Notice on the above chart that XPEV pulled back after ripping to 37 in 3 days.

Following the peak in the 37 region, XPEV pulled back for making 3 consecutive lower daily lows, thereby turning its 3 Day Chart down.

The turndown in the 3 Day Chart defined a low.

So we know that 65 represents 2 price cycles (720 degrees) up from low.

We also know that November 27 is 90 days/degrees from its 1st day of trade.

Stocks often play out in 90 day/degree decrements which mark “natural” turning points which can be highs, lows or accelerations.

So the WEEK OF November 27 is on the radar when XPEV will be 3 months from its IPO.

Interestingly, as depicted on the Square of 9 below 63 is 180 degrees straight across and opposite November 27.

XPEV traded up toward 57 on Friday. An extension to the 63-65 region sets up a potential graceful exit.

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