Showing posts with label Trade setup. Show all posts
Showing posts with label Trade setup. Show all posts
Tuesday, July 5, 2011
Friday, May 27, 2011
Trader's Toolbox: Reversals
Rules to mark a reversal high:
1. The market must make a new high for the last six to eight weeks.
2. The market must close lower than the previous day’s (or week’s) close.
3. The market must reverse the previous day’s (or week’s) action.
From CLUB.INO.COM. Original post linked on the title.
1. The market must make a new high for the last six to eight weeks.
2. The market must close lower than the previous day’s (or week’s) close.
3. The market must reverse the previous day’s (or week’s) action.
-To clarify rule three, the day or week preceding the reversal must have posted a positive close.
4. The market must post follow through action the next day (or week).
-To clarify, the market must close lower on the day (or week) following the reversal.
5. Fifth, the reversal must be accompanied by moderate to high volume. And, finally, the reversal must occur in a terminal (critical) area.
5. Fifth, the reversal must be accompanied by moderate to high volume. And, finally, the reversal must occur in a terminal (critical) area.
From CLUB.INO.COM. Original post linked on the title.
Thursday, May 19, 2011
Monday, May 9, 2011
52-week new high on Friday rule
“The 52-week new highs on Friday rule” is usually applied to the market itself and not to an individual stock.
Rule number 1: On a new 52-week high, when the market closes at or close to its high on a Friday, buy long and go home long for the weekend.
Rule number 2: Exit the long position on the opening the following Tuesday.
Rule number 3: If the market opens lower on Monday, exit the position immediately.
Originally shared by Shoyu Ramen in Finance Manila. Hope he doesn't mind me posting this one out here(sharing to other people and for personal use). Will take this one down if he doesn't want other people posting his stuff.
*Originally from Ino.com. Click the title for the original video/lesson.
Friday, February 4, 2011
Megaworld Corporation (MEG)
6-Month Daily Chart
After four months of moving sideways wit downward bias, a bullish formation has formed on the daily chart in the last couple of weeks: Ascending triangle.
Although an ascending triangle is more commonly seen as continuation patterns, there are times that it usually serves as a reversal pattern.
Breaking the resistance of the pattern at 2.20 would suggest a target of 2.40 in the short term.
Short-term upside potential : 9%
Long term upside potential : 29% - Breakout point 2.20 to 6-month high at 2.84.
*Formation of lower trough could simply mean a trading range.
After four months of moving sideways wit downward bias, a bullish formation has formed on the daily chart in the last couple of weeks: Ascending triangle.
Although an ascending triangle is more commonly seen as continuation patterns, there are times that it usually serves as a reversal pattern.
Breaking the resistance of the pattern at 2.20 would suggest a target of 2.40 in the short term.
Short-term upside potential : 9%
Long term upside potential : 29% - Breakout point 2.20 to 6-month high at 2.84.
*Formation of lower trough could simply mean a trading range.
Filinvest Land Inc. (FLI)
6-Month Daily Chart
Now that the initial condition of the system - formation of a higher peak -
is triggered today, the next condition is wait for a correction.
Optimal entries:
50% Fib retracement: 1.10
Gap support : 1.11-1.13.
Initial target will be placed at the new resistance at 1.20.
Immediate upside potential : 9%.
But with the fresh signal, 1.20 is highly likely to be taken out.
Long term upside potential : 36.36% - Lower end of entry 1.10 to 6-month high of 1.50.
**However, prices dropping back to 1.01, despite of looking attractive because of the false notion of "cheaper", would appear to be bearish as it could cause a formation of a lower peak again thus forming a bearish continuation pattern.
Also, the formation of lower peak is a system sell.
Now that the initial condition of the system - formation of a higher peak -
is triggered today, the next condition is wait for a correction.
Optimal entries:
50% Fib retracement: 1.10
Gap support : 1.11-1.13.
Initial target will be placed at the new resistance at 1.20.
Immediate upside potential : 9%.
But with the fresh signal, 1.20 is highly likely to be taken out.
Long term upside potential : 36.36% - Lower end of entry 1.10 to 6-month high of 1.50.
**However, prices dropping back to 1.01, despite of looking attractive because of the false notion of "cheaper", would appear to be bearish as it could cause a formation of a lower peak again thus forming a bearish continuation pattern.
Also, the formation of lower peak is a system sell.
Monday, January 17, 2011
Aboitiz Power Corp. (AP)
This is the reason why I am still a little skeptical with AP:
Optimal buying window for AP is when it forms a higher trough.
Optimal buying window for AP is when it forms a higher trough.
Basura Plays
The main reason why I fail every time I buy third liners is because I don't know how to trade them properly. From the previous trades that I did, I would usually put up the same size of a position the same way I put in blues and second liners. I also put up the same stop loss point. With the erratic behavior of third liners, my stop always gets hit. I am out of the trade and then stock resumes its movement.
Now to solve my problem, I decided to put up a relative small position in third liners when trading with the same amount of capital at risk.
Position sizing is probably the answer to properly gamble on illiquid stocks.
*Word of caution: I am just trying out this idea and I have no idea if this will work. Please always do your own research before taking up positions. Caveat.
**Currently using the crudest form of technical analysis: Trend lines. No other technical indicator is being used as I find them highly unreliable when day/momentum trading. RSI and MACD bearish/bullish divergences doesn't seem to work in intraday charts as they would work on a daily chart.
(If you have better ideas on how to trade this kind of issues, please let me know, it will be greatly appreciated.)
Okay, moving on, using intraday charts to trade:
APC: Breaking out at .89 should be a buy.
ELI: Consolidating at its high. Range of consolidation is at 0.79 to 0.82.
Buy at 0.79. Buy on breakout(Resistance 0.82). Buy on pull back/bounce to/from resistance at 0.82.
SINO: Broke out of trading range 0.38-0.43. Currently heading for correction and looking to test 0.43. Buy the bounce from 0.43.
SUN: Possibly forming a symmetrical triangle. Buy at 0.58 for anticipation breakout.
Now to solve my problem, I decided to put up a relative small position in third liners when trading with the same amount of capital at risk.
Position sizing is probably the answer to properly gamble on illiquid stocks.
*Word of caution: I am just trying out this idea and I have no idea if this will work. Please always do your own research before taking up positions. Caveat.
**Currently using the crudest form of technical analysis: Trend lines. No other technical indicator is being used as I find them highly unreliable when day/momentum trading. RSI and MACD bearish/bullish divergences doesn't seem to work in intraday charts as they would work on a daily chart.
(If you have better ideas on how to trade this kind of issues, please let me know, it will be greatly appreciated.)
Okay, moving on, using intraday charts to trade:
APC: Breaking out at .89 should be a buy.
ELI: Consolidating at its high. Range of consolidation is at 0.79 to 0.82.
Buy at 0.79. Buy on breakout(Resistance 0.82). Buy on pull back/bounce to/from resistance at 0.82.
SINO: Broke out of trading range 0.38-0.43. Currently heading for correction and looking to test 0.43. Buy the bounce from 0.43.
SUN: Possibly forming a symmetrical triangle. Buy at 0.58 for anticipation breakout.
Tuesday, January 11, 2011
Friday, November 26, 2010
Trade Setup: AEV - Status: Closed
Here is the 1-year daily chart of AEV:
It has been hugging the top of its trading channel for the past few weeks indicating overbought levels. It also tried to break out but it failed twice.
My entry and exit are shown in the chart.
My original exit was at point 2. However, I had trouble contacting my broker to sell them(specially last Nov 22), so my exit was extended up to this point.
I was concerned about its:
1. Bearish divergence on its MACD visible on the daily chart(point 1 and 2 on price and MACD); and
2. Bearish divergence on its histogram suggesting weakening upward momentum.
3. Too much price spread during trading. I have a relatively holding a small amount of shares but I couldn't sell them @market without driving the price down by around 3% or so!
However, point 3 on ROC suggests a "buy" on rebound but I am not willing to bet on it.
It could also be moving in a "box" but I'm not patient enough to sit and wait for the boxes to move:
Comparing it with my previous position in DMC(1 month):
The trade did fairly well, profiting from both positions.
Conclusion: Sold with 7.53% profit, around 50% off my highest gain in this position.
Good entry. Late exit.
It has been hugging the top of its trading channel for the past few weeks indicating overbought levels. It also tried to break out but it failed twice.
My entry and exit are shown in the chart.
My original exit was at point 2. However, I had trouble contacting my broker to sell them(specially last Nov 22), so my exit was extended up to this point.
I was concerned about its:
1. Bearish divergence on its MACD visible on the daily chart(point 1 and 2 on price and MACD); and
2. Bearish divergence on its histogram suggesting weakening upward momentum.
3. Too much price spread during trading. I have a relatively holding a small amount of shares but I couldn't sell them @market without driving the price down by around 3% or so!
However, point 3 on ROC suggests a "buy" on rebound but I am not willing to bet on it.
It could also be moving in a "box" but I'm not patient enough to sit and wait for the boxes to move:
Comparing it with my previous position in DMC(1 month):
The trade did fairly well, profiting from both positions.
Conclusion: Sold with 7.53% profit, around 50% off my highest gain in this position.
Good entry. Late exit.
Thursday, November 18, 2010
Trade Setup: AEV - Status: Open
Here is the most recent trade that I did:
DMC
Sold it at 39.40 because:
1. Declining volume during advances;
2. Bearish divergence on ROC; and
3. It was showing relative weakness through the entire session that day before getting pushed up at the closing which also happened the next day;
4. Found a trade setup in AEV (plus earnings report factor):
which I believe I was right as it immediately showed profits the next day despite of the strong selling pressure. I am expecting it to advance strongly once the selling stops(possibly up until mid week).
Took a position at 34.10.
Up to date comparison between the two stocks:
DMC
Sold it at 39.40 because:
1. Declining volume during advances;
2. Bearish divergence on ROC; and
3. It was showing relative weakness through the entire session that day before getting pushed up at the closing which also happened the next day;
4. Found a trade setup in AEV (plus earnings report factor):
which I believe I was right as it immediately showed profits the next day despite of the strong selling pressure. I am expecting it to advance strongly once the selling stops(possibly up until mid week).
Took a position at 34.10.
Up to date comparison between the two stocks:
