Stage Analysis Video Training Course

US Stocks Breakouts & Breakdowns - SP500, NYSE, & Nasdaq Stock Charts - Page 99

RE: Watchlist - Traders method

(HEMP) Pretty much as speculative as a stock can be...but I have owned this for a year and a half now (lived in Colorado too long I guess) but was always too embarrassed to say so on this site... Just too fun not to now. Bought it sooooo cheap and my original plan was to just hold for at least 5 years.. But I think I have to sell very very soon. Could always buy back in a few weeks when it has come back down. I dislike day-trading but I think this would be a great one to play around on...what would you do?

Beautiful little chart...HEMP CHART

RE: Watchlist - Traders method

(2014-02-05, 06:30 AM)Locked in Wrote: (HEMP) Pretty much as speculative as a stock can be...but I have owned this for a year and a half now (lived in Colorado too long I guess) but was always too embarrassed to say so on this site... Just too fun not to now. Bought it sooooo cheap and my original plan was to just hold for at least 5 years.. But I think I have to sell very very soon. Could always buy back in a few weeks when it has come back down. I dislike day-trading but I think this would be a great one to play around on...what would you do?

Beautiful little chart...HEMP CHART

Hi Locked in, It looks like you've had a wild ride on this one over the last year, so well done on your gains. However the concern with these stocks is that if you Google "HEMP stock pump and dump" or similar, you get a number of articles that suggest there's a lot of scams going on currently with this new fledgling group of stocks on the OTC market.

However, ignoring the news and just looking at the chart pattern solely this has broken out to new highs on exceptionally strong volume. For example it did more volume than Facebook's stock last month, which is crazy. So it's in a parabolic early Stage 2 move on heavy volume. So a sensible strategy imo would be to take some profits, maybe 50% now and then let the rest ride, as it will suffer some severe volatility as it's extremely extended above it's moving averages. But, the volume is the key to watch, as as long as it's lighter on the pullbacks and heavier on the up moves, then the momentum will likely carry it for a while imo, although you might have to sit through huge pullbacks that wipe out most of the gains will it's still in a Stage 2 uptrend.

I've attached a few charts. The weekly chart, and a 2hr chart, if you are going to do some trading in it, as I think that the Weinstein's method works very well on a 2 hour chart also, if you treat it identically to a weekly chart. So on the 2 hour chart you can see that it made a cup and handle pattern Stage 2 continuation move on heavy volume following the breakout, and it is a bit extended from it's 2hr 10 MA - which is at 0.1808 currently.

I hope that helps and good luck however you decide to play it. Attached are the charts



Attached Files Thumbnail(s)
       
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.

RE: Watchlist - Investor method

(2014-02-05, 03:42 AM)Tom Wrote:
(2013-03-01, 09:49 PM)isatrader Wrote: GTY attempting to complete a breakout from a one and half year base. Will need to see a volume surge to make it more interesting.

[Update] It closed the week at 20.15, which is above the 19.94 range high from July 2012, and so is a confirmed Stage 2 imo.

Hi, I am practicing Stan's investor sell-stop method on GTY and would like to get your opinions:

If I purchased GTY on Mar 4th at $20.15 on stage 2 breakout. Here is what I would do:

1. Sell Stop: the previous correction low is on Feb 15th at 18.4 so the sell stop should be set around 17 7/8.
2. On May 6th, GTY reaches previous high so the sell-stop should be set below the 30 week MA(18.49) on Apr 3rd. and that is no difference than the initial sell stop.
3 . A significant trend line is formed at point Dec 31, Feb 15, Apr 3 and set sell-stop at 21 for half of the positions . It is subsequently touched on May 29th.

Am I doing alright so far?

My beginner question is: How do I handle the other half of the position?

thanks.

Hi Tom, due to the time period you need to look back using unadjusted data on your chart, for which you need to put and underscore before the ticker _GTY

As charts get adjusted for dividends, splits, new shares etc over time which can affect the prices you were mentioning.

What I'd say about this one now almost one year later is, that if it appeared now that I'd probably no longer highlight it, as it's missing the key ingredient that all Stage 2 breakouts need. Which is at least 2x times the average volume on the breakout week, which it didn't have, although it had a slight increase on the following week, but was still only just above average.

I've marked up the chart, so you can see how I think it should have be played following the methods rules. The trendline was well established with five touch points, so you would have exited 50% on the first close below it that you highlighted. Especially as there was no volume increase on the continuation move higher, which was the first warning sign.

The stop loss positioning I've marked up on the chart, and you would have been able to raise the initial stop on the continuation by around a point just under 19 as the 30 week MA had moved up enough for it to get closer to the swing low following the Stage 2A breakout.

Finally, it made a weak lower high to form a head and shoulders pattern, and closed below the 30 week MA, so you would have exited the position at around the same level that you entered. So it would have only got a small profit from the 50% initial exit, and breakeven from the second exit, or small loss if you'd waited for the Stage 4A breakdown two weeks following the exit I highlighted.

I hope that helps.



Attached Files Thumbnail(s)
   
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.
(This post was last modified: 2014-02-05, 03:27 PM by Locked in.)

RE: Watchlist - Traders method

That is some great insight on the volume levels within the pullback. I have never really thought about that. Thanks. As for the pump and dump, I know that is always a risk with any MJ stock but this one is being called that in particular because the guy used to run a huge drug empire. I see it as the guy knows how to do business. We shall see.

I have been noticing your 2 hour charts on here (and the inter-day thread). Thanks for the added info. I will have to make up my mind on this one in the next 45 minutes Smile

I should clarify: By "he knows how to do business", I don't mean right now and at this stock price...I think he is setting up a good business for the long run. Therefore, I put some stop orders in to take advantage of the short term. Off to work with fingers crossed Haha

RE: Watchlist - Investor method

A few stock for the investor watchlist tonight:

ENZ - Attempting a Stage 2A breakout to complete a two year inverse head and shoulders pattern on more than 2x the weekly average volume.

   

PTX - it's below near term resistance and a still declining 30 week MA. But had a massive volume move into Stage 1 today, so worth watching as the Stage 1 develops. Relative performance is also improving but is still below a declining zero line.

   

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.

RE: Watchlist - Traders method

Potential continuation moves for the watchlist - CWEI, LVLT, KBALB, SEV, WSTL



Attached Files Thumbnail(s)
                   
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.

RE: Watchlist - Investor method

(2014-02-05, 11:37 AM)isatrader Wrote:
(2014-02-05, 03:42 AM)Tom Wrote:
(2013-03-01, 09:49 PM)isatrader Wrote: GTY attempting to complete a breakout from a one and half year base. Will need to see a volume surge to make it more interesting.

[Update] It closed the week at 20.15, which is above the 19.94 range high from July 2012, and so is a confirmed Stage 2 imo.

Hi, I am practicing Stan's investor sell-stop method on GTY and would like to get your opinions:

If I purchased GTY on Mar 4th at $20.15 on stage 2 breakout. Here is what I would do:

1. Sell Stop: the previous correction low is on Feb 15th at 18.4 so the sell stop should be set around 17 7/8.
2. On May 6th, GTY reaches previous high so the sell-stop should be set below the 30 week MA(18.49) on Apr 3rd. and that is no difference than the initial sell stop.
3 . A significant trend line is formed at point Dec 31, Feb 15, Apr 3 and set sell-stop at 21 for half of the positions . It is subsequently touched on May 29th.

Am I doing alright so far?

My beginner question is: How do I handle the other half of the position?

thanks.

Hi Tom, due to the time period you need to look back using unadjusted data on your chart, for which you need to put and underscore before the ticker _GTY

As charts get adjusted for dividends, splits, new shares etc over time which can affect the prices you were mentioning.

What I'd say about this one now almost one year later is, that if it appeared now that I'd probably no longer highlight it, as it's missing the key ingredient that all Stage 2 breakouts need. Which is at least 2x times the average volume on the breakout week, which it didn't have, although it had a slight increase on the following week, but was still only just above average.

I've marked up the chart, so you can see how I think it should have be played following the methods rules. The trendline was well established with five touch points, so you would have exited 50% on the first close below it that you highlighted. Especially as there was no volume increase on the continuation move higher, which was the first warning sign.

The stop loss positioning I've marked up on the chart, and you would have been able to raise the initial stop on the continuation by around a point just under 19 as the 30 week MA had moved up enough for it to get closer to the swing low following the Stage 2A breakout.

Finally, it made a weak lower high to form a head and shoulders pattern, and closed below the 30 week MA, so you would have exited the position at around the same level that you entered. So it would have only got a small profit from the 50% initial exit, and breakeven from the second exit, or small loss if you'd waited for the Stage 4A breakdown two weeks following the exit I highlighted.

I hope that helps.

Thank you!

I have some follow up questions:

1. It was mentioned that adjusted data should be favored in your interview to Stan. Why use unadjusted data here?

2. You mention "Especially as there was no volume increase on the continuation move higher, which was the first warning sign." In the same interview, Stan replied with "Volume is less important on a continuation move in Stage 2 than it is on the original breakout but there should be at least some marginal increase in volume." I have to say "marginal increase in volume" sound a bit vague.

3. I am new to stockcharts.com and trying to get the same chart as you do. Especially I would like to get the a) solid line on close. b) How to get the relative volume and relative performance chart. How do I do that?

Thanks again.

RE: Watchlist - Investor method

(2014-02-06, 01:45 PM)Tom Wrote: 1. It was mentioned that adjusted data should be favored in your interview to Stan. Why use unadjusted data here?

Just because you were referencing prices from a year ago, which would now be different on an adjusted chart. So was easier to use an unadjusted chart for the explanation so the different prices didn't confuse you.

(2014-02-06, 01:45 PM)Tom Wrote: 2. You mention "Especially as there was no volume increase on the continuation move higher, which was the first warning sign." In the same interview, Stan replied with "Volume is less important on a continuation move in Stage 2 than it is on the original breakout but there should be at least some marginal increase in volume." I have to say "marginal increase in volume" sounds a bit vague.

What he meant by marginal increase was that it should still be above average volume on the continuation breakout, which it wasn't in this case, and had in-fact been below average volume consistently following the Stage 2A breakout, and the up weeks were showing no signs of strength in the volume, and hence was a warning sign.

What we look for on a continuation breakout is 3x the average daily volume on the breakout day, and then ideally the week should still have at least 2x the average weekly volume, as otherwise there's a much greater chance of a failed breakout.

So don't settle for anything less if it's your first entry point, as there are many continuation moves every day that meet these requirements. If however, you are already in the stock from an earlier point and it met the volume requirements on the initial Stage 2A breakout, then just be more vigilant if the continuation move doesn't have a volume increase, as it could be losing momentum.

(2014-02-06, 01:45 PM)Tom Wrote: 3. I am new to stockcharts.com and trying to get the same chart as you do. Especially I would like to get the a) solid line on close. b) How to get the relative volume and relative performance chart. How do I do that?

I've attached a screenshot with the settings I use in stockcharts. I have an Extra subscription to stockcharts, so someone with a free account only, won't be able to add the moving average to an indicator like is necessary for the relative performance versus the S&P 500 zero line. So a free alternative is to use prorealtime.com if you are not a stockcharts subscriber, but you can use the majority of the settings on the free stockcharts charts.

   

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill - Reminiscences of a Stock Operator.


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