[briansmith456]

I like to use the ATR with a 52 week setting. So change the Parameters setting to 52 if you'd like to use that, but any amount is acceptable really as it depends on your trading timescale as to what you should use. So 52 weeks is just my preferred setting for investor positions, as it's the average weekly price range of the stock from the last year.

I use a maximum of 2 times the 52 week Average True Range (ATR) from the stop loss position to determine if a stock is too extended or not for me. But as I said other people use their own settings, as mine are quite strict. All I would say is to be consistent.

To calculate the ATR distance. Take the current ATR amount shown on the chart. So for example if it's 0.78, and the price is 31, and the stop loss position would be 29, then 31 minus 29 = 2, and 2 divided by 0.78 = 2.56. So it would be at 2.56 times the weekly ATR. Which would mean it's above my maximum tolerance of 2 times the weekly ATR.

Much appreciated your explanation of how to use ATR.

[briansmith456]

Hi,
Can you please comment on ABM.V (attached). It has based for a couple of years and finally broken out recently on huge  volume. The proper buy point was around 32 cents on the breakout I believe but I am wondering  if it is in buy territory right now or maybe best to wait and hope it gets closer to the 30 ema (it is about 20% above the 30 ema currently). 

I have added the monthly chart as I see the cloud is huge and the price has  just penetrated it so wondering if  you also look at the monthly chart in terms of the cloud at least as based on this chart alone it looks like maybe this stock is not a buy given the huge cloud on the monthly so perhaps the easy money was already made.

Thanks for your thoughts.

Brian

[isatrader]

Hi,
Can you please comment on ABM.V (attached). It has based for a couple of years and finally broken out recently on huge  volume. The proper buy point was around 32 cents on the breakout I believe but I am wondering  if it is in buy territory right now or maybe best to wait and hope it gets closer to the 30 ema (it is about 20% above the 30 ema currently). 

I have added the monthly chart as I see the cloud is huge and the price has  just penetrated it so wondering if  you also look at the monthly chart in terms of the cloud at least as based on this chart alone it looks like maybe this stock is not a buy given the huge cloud on the monthly so perhaps the easy money was already made.

Thanks for your thoughts.

Brian

Hi Brian,

With regards to the monthly, I don't tend to look at the monthly cloud as much in a recovery stock, as it's guaranteed to be under it, and if it had a large Stage 4 to be a very big cloud. So I don't have it on the monthly chart.

On the weekly, the breakout in February was very strong and rising outsized volume for three weeks before starting to consolidate. The consolidation has formed a flag pattern and is trading below the declining 10 week MA currently, but remains above a strongly rising 30 week sma. The volume on the consolidation / pullback period has been less than the advance, and the relative performance versus the S&P 500 remains strong above a rising zero line.

I don't have the sector charts for it as it's a Canadian small cap, in the Materials / Other Mines sector. But the basic materials industry sector has been one of the weakest during the recovery since Christmas in the US at least. The other negative I can see is the thinness of the stock, as if you look at the intraday charts, it appears to be very thinly traded at times, which tends to mean higher spreads.

In terms of trading it, the 52 week ATR is 0.061 currently, and the most recent swing low under the 50 day MA is 0.52. So the trader stop loss position would be around 0.499 imo, and so with my maximum 2x the 52 week ATR risk tolerance, currently the highest entry point would be 0.621, which is just around where the recent downtrend line meets. So wouldn't meet my risk requirements personally. But is an interesting looking chart.

       

[briansmith456]

Hi Brian,

With regards to the monthly, I don't tend to look at the monthly cloud as much in a recovery stock, as it's guaranteed to be under it, and if it had a large Stage 4 to be a very big cloud. So I don't have it on the monthly chart.

On the weekly, the breakout in February was very strong and rising outsized volume for three weeks before starting to consolidate. The consolidation has formed a flag pattern and is trading below the declining 10 week MA currently, but remains above a strongly rising 30 week sma. The volume on the consolidation / pullback period has been less than the advance, and the relative performance versus the S&P 500 remains strong above a rising zero line.

I don't have the sector charts for it as it's a Canadian small cap, in the Materials / Other Mines sector. But the basic materials industry sector has been one of the weakest during the recovery since Christmas in the US at least. The other negative I can see is the thinness of the stock, as if you look at the intraday charts, it appears to be very thinly traded at times, which tends to mean higher spreads.

In terms of trading it, the 52 week ATR is 0.061 currently, and the most recent swing low under the 50 day MA is 0.52. So the trader stop loss position would be around 0.499 imo, and so with my maximum 2x the 52 week ATR risk tolerance, currently the highest entry point would be 0.621, which is just around where the recent downtrend line meets. So wouldn't meet my risk requirements personally. But is an interesting looking chart.

Thanks, I very much appreciate your analysis. All your comments are very informative and I am learning a lot.

Brian

[moneymaker]

Hi everyone,

I'm reading Stan's book and I'm wondering how does everyone look at the performance of the different sectors?

Do you choose an ETF for each sector and you monitor that particular ETF? If so, I'd appreciate if someone shared their ETFs.

Thanks in advance.

[pcabc]

Hi everyone,

I'm reading Stan's book and I'm wondering how does everyone look at the performance of the different sectors?

Do you choose an ETF for each sector and you monitor that particular ETF? If so, I'd appreciate if someone shared their ETFs.

Thanks in advance.

For the US sector SPDR ETFs are quite handy for this.  I use the relative strength of the ETFs against each other to take a view on the strongest sector.   Depending on where you are getting your data there may be other options.  For the UK there are sector indicies, NMXnnnn, which I find less useful, partly as the UK has not been doing so well and partly the sectors are numerous with fewer consituents.

[moneymaker]

Hi everyone,

I'm using tradingview.com for my charts and I've noticed something odd with the moving averages.

When I change the viewing range, it seems like the moving average changes but it shouldn't.

For example, look at these images:

In the second image (6 months range), the MA(150) closely follows the SP between February and May. When I change the viewing range to 1 year, the moving average changes and doesn't follow the same distribution anymore. All I did between the second and first image was switch the viewing range from 6 months to 1 year.

This is odd, right?

[briansmith456]

Hi,
I was hoping you could comment on gold miner GCM.TO (chart attached).

The 30 ema and 30 ma are both rising and the 10 ma is flat. Volume on the breakout has been above average. Price is extended from 30 ema so I was wondering whether perhaps it could still be considered a proper entry long if it comes back to test the trendline around $3.65 (this would allow the 30 ema to catch up some).

Thanks for your thoughts.

Brian