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.
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.