At the beginning of October Last year, and large Head and Shoulder Pattern (H&S) was Identified and confirmed on the weekly chart of LEI. This set the stock up for a longer term view of bearish, with a likely target of $12.00.

This week, LEI has hit the top of a downtrend channel and weekly resistance after a healthy counter trend. A valid Bearish Down Day breaking past the counter trend, with higher volume and supporting indicators could be an opportunity for a great short term trade. Keep an eye on this one.

]]> http://planetwealthblog.com.au/short-term-trade-lei/feed/ 0 http://planetwealthblog.com.au/succesful-trading-using-chart-signals/ http://planetwealthblog.com.au/succesful-trading-using-chart-signals/#comments Fri, 27 Feb 2009 02:40:52 +0000 Planet Wealth http://planetwealthblog.com.au/?p=343

Waiting for confirmation of a chart’s signals is crucial to successful trading. Though a chart may show high probability signs of breaking one way, it is still possible for it to break in the opposite direction.

WOW is a good example of the above happening. Technically, the charts have been bearish on WOW for some time, due to the 16 month down trend and weekly resistance meeting at the same point, giving the expectation of it being pushed down again. Yesterday and today the stock clearly broke up and out of these two lines making the view now Bullish.

To add to the bullish view yesterday was a breakout and confirmation of a bullish flag (flags spoken about it previous postings). The potential price project the flag gives is around $30.00. However, there is a weekly resistance at $29.30 which could cause the stock to temporarily retrace or consolidate before attempting to break through to $30.00.

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– First of all, let’s cover what we mean by this phrase. We use the term ‘Renting’ our stocks, because everyone understands this in terms of property. We buy a house or apartment, we become a landlord, and we rent it out to someone else. We receive money (rent) over a designated period.

Well, we can do almost exactly the same thing with stocks. We can buy stocks and then rent them out. If we already own stocks, we can rent them out. We choose the rental price at which we want to rent them, we choose the rental amount we are happy with, and we choose the time period we want to rent them out for.
And the stocks we ‘rent out’ can’t trash our house, can’t be late with their payments, and they can’t keep asking us to fix things for them. They are a lot less demanding tenants than real people!

However, if we go to our stockbroker and say, “I have some stocks I want to rent”, he will no doubt think we’ve gone crazy, and will have no idea what we’re talking about.
So, what we need to do first is understand how to talk like a stockbroker!

What new language do we need to know to speak like a stockbroker? It’s called options.
You may have had some experience with options, or heard about them, and may have even been told they are very dangerous (by ill-informed people un-educated or inexperienced in option trading, no doubt!)

To find out how you can rent shares from the US market please visit our income guarantee page.

If you want to find out how to Rent Shares in Australia please visit our page here.

photo credit: zombieite
photo credit: zombieiteRenting Shares

This week on the XAO there was a rise of 172 points over all. Is this move to the upside likely to continue? Let’s take a look at what the stock chart chart is showing us.

Tuesday was a bounce off a support after downward momentum failed to continue on from Friday. As the week progressed there was small movement s up. At the close of Friday, the XAO rests at a cross roads of two validated trend lines. The first is the top of a channel that has been forming over the last 5 or 6 months and the second is a resistance line that has been well respected particularly in that last 2 months.

The direction of the XAO next week with the higher probability is down to re test 3300. If it was breach up and out of the channel and resistance that it now sits at, we could see 3700, which is the next major resistance.

(click on image to enlarge)

Go to http://www.planetwealthtradingroom.com for our live trading room