StockFetcher Forums · General Discussion · noah<< 1 2 3 >>Post Follow-up
txtrapper
548 posts
msg #28172
Ignore txtrapper
8/31/2003 10:16:49 AM

TDF signaled "buy me" on 8/8/2003 before the "box theory"

1) First you had to have your computer turned on, and looking at TDF on 8/8/2003 using a 3mon/D Prophet.net Pro chart using RealTime Pro.
2) You see RSI(2)comming off a low between 0% & 20%. (Muddy Method)
3) You see three days of declining volume.
4) You see three days of declining price. (Muddy Method)
5) Price sitting on EMA(150) (Support) (HolyGrail & TheRumpledOne)
6) Stock was in an uptrend before the pullback.
7) Stock has over 150,000 volume.

RUMP...a conservative buyer may have waited until he saw (two or three white candles (Rump2003)) Or flip to 1Mo/D chart clearly defines the "buy signal".

Chart Reading is an art not a science!

txtrapper




Noahedwinbeach2
135 posts
msg #28175
Ignore Noahedwinbeach2
8/31/2003 2:35:44 PM

Ok well TDF has been in an uptrend all year but you never know when it will begin to fall. That is the point of the box theory. I just don't like indicators to tell me when to buy and sell. I rather let volume and price do that for me.


EWZuber
1,373 posts
msg #28178
Ignore EWZuber
8/31/2003 3:19:42 PM

I think it is important to recognize that it takes more than one type of strategy to take full advantage of the opportunities in the market. There is no single filter that will enable us to realize this potential. The question from rgrgrg about CNET was in the present tense and it seems appropriate to answer it in the present tense.
On the daily chart CNET broke out above resistance at the 52 week high on 8/27 with good volume. The move was large though and this adds extra risk to an entry. Notice that on Friday CNET dropped down to test support at the previous cycle high set on 7/15 at $8.29 and bounced up confirming it as support for now. On the hourly chart CNET became oversold while testing support and we had a stochastic fast line crossover along with a +DMI(2) crossover. These are bullish indications and exactly what I would want to see. I would watch for an entry as close to support at $8.29 ~ $8.31 as possible. This way any significant violation of support will allow for a minimal loss and if the stock continues higher a position here will maximize returns. I would not chase the stock though as it is very overbought on daily charts and could very easily consolidate here and test support several times offering an entry again later on. Weekly stochastics are rising which bodes well for the longer term.
TDF has been in an uptrend for a good while but some system of discipline is needed whether it is boxes or rsi(2) or whatever to get the appropriate entry point. An entry on 8/7 as TheRumpledOne suggests would have not worked for me as I am very adverse to losses. TDF had been using the 15 DMA as support and tested it on 7/18 and 7/23 successfully. On 8/8 TDF was quite oversold at a stochastic value of 14 and tested the 15 DMA once again at $11.91 and as txtrapper pointed out on 3 days of declining volume. A closer look on the hourly chart finds that at this exact spot TDF was oversold here also and testing a short term resistance trendline as support that started from the high of the final hour on 8/4 across the high of the final hour on 8/5 and tested as support on the second hour of 8/8 while the 15 HR.MA was flattening out so it could be used for support when broken as resistance. TDF began to rise slowly testing this area several times and offered multiple entry points from 11.92 ~ $11.95. This was a beautiful set up and this was the place I would have wanted to take a position. A position here would have minimized any downside as it would be taken dead on support and this would also maximize returns on any upside. Any weakness would show up first on the intraday charts. This is one way how daytrading techniques can be of significant use in entering a position.
To use strictly price and volume to pick your entry points will bring you greater risk, more potential downside and less potential gains on a move up. I think it is better to add price and volume into the equation along with indicators. Also by using indicators it allows for multiple methods to determine when a stock is likely to start a new downtrend or even just pull back. This is where William Oneal failed, I suspect, since he did not use stochastics but instead relied on price/volume. I believe this is what caused him to lose his stock fund business.


eyoung
42 posts
msg #28182
Ignore eyoung
8/31/2003 5:04:21 PM

ewzuber, where did you get all the fancy book learning. any good books you read
eyoung


EWZuber
1,373 posts
msg #28195
Ignore EWZuber
8/31/2003 11:23:54 PM

Don't know if it's fancy, picked up bits and pieces along the way but a lot of the TA that I use is from spending thousands of hours studying charts and drawing conclusions and testing them over and over, eliminating what doesn't work and building on what does. When you're not inherently good at something then another way to reach a goal is to become obssessed. I've read, William Oneal's, 'How to make money in stocks'. Got his news paper for a while and studied his approach. Read Stan Weinstein's, 'Making money in Bull and Bear Markets' , and David Floyd's, How I've Achieved Triple Digit Returns Daytrading.' Read a couple others but weren't what I was looking for.


txtrapper
548 posts
msg #28202
Ignore txtrapper
9/1/2003 11:29:45 AM

EWZuber, in reference to your post of 8/31/2003 at 3.19PM can you be more specific on how any weakness in TDF would show up first on the intraday charts?
Do you mean 1D/1min or 5 day/5min. charts, etc. And what indicators/price/volume action would you be watching for weakness? And the 15 DMA you mention, do you mean 15 "Daily Moving Average" or 15 "Displaced Moving Average", or yes it exists in Prophet Pro.

thanks,

txtrapper


rrochon
117 posts
msg #28205
Ignore rrochon
9/1/2003 3:18:33 PM

Noah,

Using
Fetcher[Show stocks trading at 260 week high and closed at 200% above the 52 week low and closed between .5 and 25 and average volumn(90) is above 100000]


I come up with GSS, LEXR and SNIC.

I don't like SNIC's chart, but GSS and LEXR both look pretty good.

GSS made a new breakout on 7/9 at 3.09 and the 4 day low formed a box on 7/15. On 7/17 the lows dropped below the previous box low. If I had gotten out then I would have missed the 69% gain it has made since then.

LEXR made a breakout on 6/18 at 9.78 and formed a box on 6/24. After doing this a number of times it dropped below its previous box low of 12.43 on 8/6. Exiting at this time would have missed the subsequent 71% gain.

I guess a person could re-enter at the next breakout, but is there anyway to avoid getting whipsawed out of a good stock?

Dick




rrochon
117 posts
msg #28208
Ignore rrochon
9/1/2003 4:57:11 PM

Noah,

Using
Fetcher[Show stocks trading at 260 week high and closed at 200% above the 52 week low and closed between .5 and 25 and average volumn(90) is above 100000]


I come up with GSS, LEXR and SNIC.

I don't like SNIC's chart, but GSS and LEXR both look pretty good.

GSS made a new breakout on 7/9 at 3.09 and the 4 day low formed a box on 7/15. On 7/17 the lows dropped below the previous box low. If I had gotten out then I would have missed the 69% gain it has made since then.

LEXR made a breakout on 6/18 at 9.78 and formed a box on 6/24. After doing this a number of times it dropped below its previous box low of 12.43 on 8/6. Exiting at this time would have missed the subsequent 71% gain.

I guess a person could re-enter at the next breakout, but is there anyway to avoid getting whipsawed out of a good stock?

Dick




EWZuber
1,373 posts
msg #28213
Ignore EWZuber
9/1/2003 5:25:33 PM

txtrapper, 15 DMA is 15 Day Moving Average. 15 HR.MA as you probably guessed is 15 Hour MA. I look for weakness on the intrraday charts in several different ways. Stochastics play an important role here. If the stock is testing support while overbought, that is a very bad sign. If I see the 25 & 50 HR.MAs violated as support and the stochastic cycle is a good ways from being oversold I will usually close the position because there is likely more downside to come, particularly if the stock has become overbought on daily charts. ( unless I have good support from the daily chart below that intraday support ). If the 25 & 50 HR.MAs are violated but the stock is very oversold on hourly chart, or 2 & 4 HR.MAs on 5min. chart, I will usually hold it a while longer because usually the bottom is near and they usually bounce back quickly. If a stock is getting overbought on daily, hourly and 5 minute charts and is up against substantial resistance on daily chart then often times I will use the 25 or 50 period ( 2 & 4 HR.MAs ) on the 5 minute chart as sell triggers. When they are violated as support often that is within a percent or so of the top of the accumulation phase on daily chart. Of course any pattern that has emerged will also come into play in the decision. Usually some topping pattern will emerge on the hourly and or 5 minute charts that fortells the end of the accumulation phase on the daily chart. Head and Shoulders, double tops etc are all valid on intraday charts also they just don't necessarrily have as much long term implications or as much depth ( amplitude modulation ) as one of these would on a daily or weekly chart. When seen forming while the stock is also at resistance on daily chart these patterns can be very revealing. What I like about this approach is that if one is using end of day charts to determine entries and exit points there will be a substantial amount of slop. In other words one may decide to set a stop at 5% below the entry for safety. But when using the hourly and 5 minute charts, this downtrend is easily visible long before it reaches those levels because what you have done is essentially expand the scale for a micro look at the stocks movement, volume patterns etc. Watching the 5 min. chart and seeing the stock bounce down in an overbought condition from what was support at your entry point on daily charts ( now is resistance on 5 min. chart ) gives a good indication that it will be going lower long before you would otherwise have a clue. Using intraday information enables a complete macro view or whole view. Usually it is possible to close a recent entry just 1 or 2% ( or less ) below entry price as a stop instead of 5% or more. Then re-enter when the intraday chart gives you the next buy signal. Once you are in and have some distance above your entry then you can relax a bit until the daily chart shows signs of becoming overbought or hitting an impenetrable resistance. Or even use weekly or monthly charts from here out, depends on your time frame.
For instance using WSTL as an example. I bought the stock around $7 and change on 8/18 I think it was. The stock became overbought on daily charts on 8/20 and was up against resistance at the 25 DMA. On 8/21 the stock formed a bearish rising wedge on the 5 minute chart and less visible on the hourly chart. The pattern was broken to the downside and i closed the position at $7.73 around 2:00 on 8/21. Shortly after this the 50 HR.MA was violated the stock formed a downtrend and the stock dropped to $7.06 the following day. On 8/25 & 8/262 the stock formed a consolidating triangle pattern that was barely broken to the upside in the last 10 minutes of the session on 8/26 and held which gave a buy signal on DMI+ ( hourly chart ) and from the pattern bullishness itself. The next day there was a big gap up above the resistance that originally held it back before. ( Thats one way to eliminate a problem resistance area. ) This is not for everyone and requires a lot of focus. I'm not recommending this for anyone here, this is strictly a TA discussion. This is JMHO. Sorry about the length.


TheRumpledOne
6,358 posts
msg #28217
Ignore TheRumpledOne
9/1/2003 6:57:26 PM

Hey EWZuber:

Please keep the record straight. I posted CNET was an entry on 8/7 not TDF.




StockFetcher Forums · General Discussion · noah<< 1 2 3 >>Post Follow-up

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