Profit Hunting

On paper last week was fairly decent.

Leadership seems to be in tech/entertainment stocks and financials.  Nobody is interested in companies that make things anymore.

Couple of charts to have a look at;

XOM breakout, expansion on high volume

XOM breakout, expansion on high volume

XOM looking good on a high volume breakout over double-top resistance.  Expansion days on the breakout were consecutive at >1.5ATR which is strong.

Looking for 3-5 days of narrow-range consolidation on lighter volume for entry signal here.  Alternatively, a more longer term move back to $50 for entry, which would provide a better risk reward ratio with stop placement at $49.25

This chart above is almost identical to the MGA chart I posted in March last year.  Here’s what eventually happened there:

MGA post breakout bull-flag behaviour

MGA post breakout bull-flag behaviour

These trades are good setups – the hard part is being able to manage the downside risk and time the entry.

Stop placement when trading flag consolidation over a period of 2-3 weeks can be tricky, so you’d be looking for an exact entry signal on an intra-day basis here.

Falling knife

AMD falling knife

Posting this for any long term value traders out there.

Risk reward is immense right now, but this is ticking down at all time-lows (>20 years) for the third time in 7 years.  The downside risk is about 15 cents, but I couldn’t really sugest a long here.

I’d be more interested in shorting the first retest of the breakdown of Fridays close.

WPX daily, breaking down

WPX daily, breaking down

An actionable short, similar to the setup in AMD but in WPX right now.

This is breaking a good base a key level ($10), forced by some extremely high participation.

A short on a move back to 10 offers an extremely attractive and low risk trade – if you can get it.

However, judging by the intra-day chart of MPX, this ship may have already sailed.  Short-term ascending wedge back in to the breakdown area.  Great trade if you can catch them, but this stock would have had to have been on your radar before it was near $10.

Has WPX already given the best risk/reward short?

Has WPX already given the best risk/reward short?

Profit Hunting

Not too many good looking medium/short term trades at the moment.

A few longer term charts caught my eye though;

ABX daily 10/07

ABX daily 10/07

Gold isn’t having a good time just now, and ABX is at 20 year lows just now, having just cracked down from a few long term support levels in recent months.

Medium term triple bottom support here at the key psychological $10 level may mean some bottom fishers might start stepping in soon.

However..

GLD monthly

GLD monthly

GLD still showing some signs of technical weakness, with the next support at 100.  100 on GLD (1000 on GC contract) would be a better level to step in to the likes of ABX, GOLD and GG.

GOLD between 55-60 and GGs current descending wedge formations offer a little more downside protection compared to the fresh air on ABX.

INTC monthly

INTC monthly

Intel stepping in to some strong support levels just now but with some heavy medium term weakness in the form of a year-long reversal formation (head and shoulders) on the daily.

I’m not sure how to interpret the thin relative volume at these levels.

There will be some good trades coming up here soon, since this stock has some good levels to work from.

Personally, I’d accumulate at 12 for extreme long term holds.  But that price is very very far away for a stock like Intel.

What’s changed in trading in 15 months?

Not much.

It’s been 15 months since my last post.  During this time I’ve become a 9-5er in IT, and have barely caught a glimpse of any market action since last March.

I’ve had a chance these last few days to re-kindle my old passion.  It started by checking some charts and some older sites, before I hit Google.

The biggest surprise to me is that barely anything has changed in the trading scene in nearly a year and a half.

The same vendors are selling the same software.

The same brokers are selling the same commission rates.

The same ‘gurus’ are selling the same trading systems.

The same analysts are posting the same drivel on the same sites.

Trading still seems like a daunting and secret world, inaccessible to your average Joe.

I thought there would be something new by now, given all the changes in web technology and the way content and ideas are being shared.

All the indicators and trading systems are MIA from thinkorswim, so I’ll be starting with a clean slate on that front.

I won’t be able to commit a lot of time to trading or analysis due to work, but the goal is to get my toes wet by the end of the year.

Lastly, here’s some entertainment for you.  I stumbled across this video on youtube while looking at some Market Profile stuff.  Delighted to have found someone who can read the future.

I really don’t know where to start with this guy..  I’m ashamed for mankind.

TSLR Weekender

Market had another pullback this week as the Dow continues to move away from an area of strong resistance at 16500.  Nasdaq and Russell are holding a little better.

There is a distinct lack of quality charts at the moment, which usually signals a good time to sit out from the market until it either pushes higher or begins to follow through on the technical reversal.

This weekend I want to outline a few offering downside hedges.  I’m not saying the market is going to roll, but a few of the hedge plays are looking good technically.

GM reversal formation, lots of these about just now

GM reversal formation, lots of these about just now

GDX continues to move as expected VXX for VIX volatility TZA wedge action Nice and tight post-reversal consolidation

 

Profit Hunting

Not your average Profit Hunting post.  I checked the archives of my blog and it turns out it is officially six years old.  Six years is a long time and I can still remember the early days of my trading career pretty well!

Coinciding with the birthday, I also opened a document I wrote in Drive which outlined a list of articles I was going to write to start a site focused on trader education.  Here’s a time stamp which outlines how much of a procrastinator I have been lately!

Yikes, a year.

Yikes, a year.

Going in to this sites seventh year (!) I am planning to pull my finger out and crack on with it.  Even if it is just one article a week, progress is progress.

Happy birthdays aside, lets check some trade ideas and some technical lessons;

MGA breakout and continuation example

MGA breakout and continuation example

Potential reversal in COST

Potential reversal in COST

Just missed FCX this week!

Just missed FCX this week!

Gold recovery, options ahead

Gold recovery, options ahead

CLF continues a melt-down

CLF continues a melt-down

WLT is a short term traders vehicle right now

WLT is a short term traders vehicle right now

Keep an eye on AGO

Keep an eye on AGO

 

 

Profit Hunting

Quick technical post on two charts catching my eye just now.  I’m on a different computer than usual so forgive me for the lack of notation on the images.

AMBC ripping

AMBC rapid expansion phase

AMBC isn’t a ticker I normally keep an eye on but it popped up on my expansion scan today.  Great inverse head and shoulders and a strong base breakout.  It’ll be interesting to see if this consolidates on lower volume within a narrow price band next week.  This will provide a good momentum-based technical setup, however I don’t like how extended this is from nearest support from a risk management perspective (30% away).

PVH flag

Post reversal consolidation

PVH is another stock I’m not familiar with, but it too popped up on a scan today.  I don’t often sit and watch the markets live at the moment, so when something does pop up I usually have a good look at it.

This has a good expansion phase, but what I’m more interested in is the classic 3-day consolidation phase on light volume after expansion.  Prior to the advance from 115-125, it formed a nice double bottom reversal formation at a previous gap area.  After moving sideways for some time, a reversal and continuation formation could serve as a good catalyst moving forward.

Despite the small profit potential on a $10 measured move, this setup has low downside risk at $124, offering a risk/reward of 5:1 at todays price.  A second buy opportunity lies at the $115 area, which could also yield a short-side trade on a breakdown.

Two decent charts to keep an eye on.

Profit Hunting

Puckle charts to have a look at.  Not a massive amount of good technicals about – a lot of stocks seem to have made key moves over the past fortnight so this week there is a lot of ‘late to the party’ setups.

AET, same as GM - no notation needed

AET, same as GM – no notation needed

GE make or break

GE make or break

GM trend & lateral junction

GM trend & lateral junction

Longer term consolidation phase on JNJ

Longer term consolidation phase on JNJ

Potential breakdown on MDT

Potential breakdown on MDT

In other news, I’m waiting for Ghost to get to version 1.0 before swapping the site from WordPress.  TSLR & WP seems clunky and outdated now and I’m looking to start with a clean slate.

Long time no tunes too!

Profit Hunting

As a technical trader, I love how a few sessions can turn an average list of stocks in to a bunch of great trade set-ups.  Lots of good techicals out there this week which serves as a reminder that patience is a virtue when it comes to trading.

You’ll notice the market going through spells like this a dozen or so times a year.  These spells offer the best risk reward ratios as stocks move above resistance or towards established bases on good volume.

These periods are where most technicians make the most of their coin.

I barely made it beyond tickers beginning with ‘B’ before I had enough content for a profit hunting post.  RVBD has been on weekly-watch for a few weeks.

ABT keen for a breakout to fresh highs

ABT keen for a breakout to fresh highs

Strong trend on AET as it too looks for new highs

Strong trend on AET as it too looks for new highs

Interesting technicals on BEN, could go either way

Interesting technicals on BEN, could go either way

Long term reversal playing out in RVBD

Long term reversal playing out in RVBD

ACAS, MRO and COV are 3 more stocks with charts similar to ABT & AET.

My gut shot is bullish, however with few of these charts confirming their breakouts (DOW a prime example) I can see how bears would be scaling in here.

These price levels as of Thursday pre-market offer excellent risk/reward ratios for both longs and shorts, so it will be interesting to see who wins heading in to next week.

Happy trading.