Friday, February 13, 2009

A Little Restless -- Three More Charts

These are just a few charts that I found interesting. I probably wouldn't do anything long term in any of them. I like the day trades. But it is kinda nice to have a long term image in your head when you pull the trigger. Resistance and support, volume trends, and moving averages can always help in determining a safe place of entry.

All of that volume on the weekly chart, contributing largely to a series of small candles could signal indecision. When coupled with the high stochastic and the descending 50 week and the nearing 200 week resistance, I'm going to say there's a chance for a pullback. Especially as it reaches 37 or so.

RIMM is flirting with its 50 day moving average after posting earnings. With so much volume on the first gap down, I'm going to say that there is a good chance it won't be able to break that day's highs. A look at the intraday would help determine the likelihood of that statement. A break below the 50 is not a good sign. Well, for the longs that is.

Looks like COH is coming up to its lows. I'd be careful, as retail sales are likely to continue sucking. But, with the declining volume over the last few days, I wouldn't be surprised to see this turn upwards. Then again, just because it hasn't gone lower, does not mean to hold onto a stock while it continues lower. Bail this shit if it break down on heavy volume. I never understood $400 purses for women who make that much, after taxes, in a week, anyway.


Charlie G. said...

Welcome back. I am starting to get get convinced I need to learn how to read daily charts better for day trading. I usually only look at like 15 min, 5 min and 1 min charts.

On the first chart, I thought decrasing volume meant a possible decline, buy higher volume with a flattening price may show a battle between demand and supply in which the sellers win?

Complacent Panda said...

From what you wrote, I think you're right. I guess, my use of the word pullback may have been poor. This will likely have a large pullback. I think the sellers will win, like you said. Anyway, there's definite resistance around 37.

PS: Although I'm guessing you don't need to read daily charts for success, I like to know what's going on in the overall picture. Multiple timeframes (including some daily or weekly frames) tends to give me a little more of an edge.

Mark said...

I'm not 100% sure I know what I'm talking about but i read somewhere that once the volume dries out from either buying or selling it will hit like an equilibrium and turn the other way. I think you can even see it in COH there. at the start of the chart in late sept price goes up. buying volume peaks then declines a little. the next big block of buys comes approx nov 24th to December 1st as price rises. again buy volume declines gradually until the price peak. above 22nd December sell blocks decline then stock bottoms again. I read about that in this traderlaboratory forum. not even sure how signific this is

mark said...

yeah, not sure how much faith to put in this bc it mentions smart money. there is no smart money. he

You can see that this doji is making a new low on the chart, and the volume is lower than all of the previous candles. By standard candlestick analysis measures, one would come to the conclusion that this bar represents indecision on the part of the market participants. However, when viewed from a WCVA perspective, it is clear that no indecision exists here. The chart shows that there are few interested sellers at this lower price and the price comes back to close near the open. Within the next four hours of trading this market jumped more than 25 points.

With this formation, it is important to understand that the smart money, which represents a large percentage of the overall trading volume, is not selling as lower price levels are explored. This is clearly evident and is shown by the reduction in total volume. If the smart money is not selling, retail traders need to be aware of this. This will prevent them from selling at market bottoms and allow them the opportunity to establish a long trade into the path of least resistance.

Complacent Panda said...

I like your last paragraph (not that your first few don't make sense. I like the volume ideas)

It's sorta what I was thinking. As volume declines there are fewer people selling at these lower prices. If the smart money was scared it would get rid of the stock and you'd see larger volume. But there's very little volume. It's like the smart money is trying to get the retail traders to give up their shares for less than they're worth to the big money.

Thanks for the ideas Mark.