I entered GS today. Nice triangle pattern formed post trend breakout. Nice volume within triangle as well.
Today’s Entry: STP
I entered STP today on weakness. The stock has shown strong strength in relation to the market, and shows a strong volulme pattern on the recent move up. My target is the September high.
AIG is a Great Low Risk Setup
AIG's volume pattern shows that it is under accumulation. This pullback offers a low risk setup. If entered around $37, with a stop under the 20 day moving average at $34.50 and target near the recent high at $50, we are looking at a 6:1 reward ratio. If you find enough trades like this, you... Continue Reading →
CX has a great looking chart that shows strong accumulation (volume pattern) and is breaking out to highs. The stock is extended, so I will wait for a pullback for entry.
Today’s Trades: SKF and SRS
I used today's strength to enter two bearish focus list stocks today, SKF (financials) and SRS (real estate). Both are inverse shorts. Note that strong volume pattern during the price consolidation range. There is still room to pullback, so I used small position size. 300 shares SKF at $44.11 400 shares SRS at average price... Continue Reading →
Strategy Session: Using Distribution Patterns to Predict Trends and Trend Failure
The second most important aspect of my trading strategy (behind support and resistance) is using volume to classify stocks that are under accumulation and distribution. Distribution is under way when, over a period of time, stocks show higher volume on down days and lower volume on up days. In a bullish trend, this predicts the... Continue Reading →
On the Radar: Residentials
Residential Real Estate and homebuilders is one of the hottest sectors right now, showing strong accumulation, price patterns and relative strength. One of my favorites is DHI. The chart speaks for itself . . .
A Crappy Picture That Clarifies the Ideal Volume Pattern
This picture I created ain't pretty, but it does a good job of showing the type of volume pattern I look for during bottom formations:
There's a lot to like about the DIG chart:1. Postive RSI divergence2. Successful test of bottom support3. Long tail price bar at support4. Oversold stochastic turning up5. Strong obv and volume action
The FXI Answer
I left my analysis of FXI open ended in the last post and a few of you seem to think I was bearish!The pattern is in fact quite bullish, and points to a bottom formation. Compare the current volume pattern to that during the top and bear run. For the first time, positive volume exceeds... Continue Reading →