January 27, 2009
Enter Stock Position
By Planet Wealth
Many systems available out there, identify patterns in charts and the break out days. Last week CSL had an ascending triangle with a breakout day, as shown in the chart below.
(click on images to enlarge)
It seems like the boat has already sailed when a stock has went so much before entering a position. What if there was a way to tell if the probability was in your favour before the large breakout day.In previous entries I have spoken about some key factors that should be considered in your trading system such as volume, weekly support lines and peaks and troughs. Let’s take a closer look at this case scenario and see if the chart was telling us anything before the breakout day.In the chart below there is just over 2 months of data and the first obvious sign long would be the higher probability direction of the breakout is, the major Higher Peaks(HP) and major Higher Troughs (HT), indicating for the medium term the buyers are in control. The second one to stack the odds in our favour if considering an entry on the previous day to the breakout day, is the day has closed above a major weekly support line with increased volume on the day before.
Go to http://www.planetwealthtradingroom.com for our live trading room
(click on images to enlarge)
It seems like the boat has already sailed when a stock has went so much before entering a position. What if there was a way to tell if the probability was in your favour before the large breakout day.In previous entries I have spoken about some key factors that should be considered in your trading system such as volume, weekly support lines and peaks and troughs. Let’s take a closer look at this case scenario and see if the chart was telling us anything before the breakout day.In the chart below there is just over 2 months of data and the first obvious sign long would be the higher probability direction of the breakout is, the major Higher Peaks(HP) and major Higher Troughs (HT), indicating for the medium term the buyers are in control. The second one to stack the odds in our favour if considering an entry on the previous day to the breakout day, is the day has closed above a major weekly support line with increased volume on the day before.
The next step is to zoom into the last week or so of trading. It is here we can see clearly the buyers are in over all control with HP and HT all the way. All of these points combined make for a high probability trade to go long the day before the breakout day. Being able to do this adds an edge to your trading by taking full advantage of the price movement from the opening of the first day of the go.
Go to http://www.planetwealthtradingroom.com for our live trading roomTopics: Fundamental Analysis, General Commentary | No Comments »
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