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RE: Beginners Questions - Red Barron - 2018-05-11
A S1 stock rises above a decreasing 30WMA and resistance. Volume and RSC look good. Market and industry group are bullish. Does this move signal a suitable entry point?Â
Conversely, a stock falls below an increasing 30WMA and support. Does this signal time to sell?
RE: Beginners Questions - isatrader - 2018-05-11
(2018-05-11, 05:14 AM)Red Barron Wrote: A S1 stock rises above a decreasing 30WMA and resistance. Volume and RSC look good. Market and industry group are bullish. Does this move signal a suitable entry point?Â
Conversely, a stock falls below an increasing 30WMA and support. Does this signal time to sell?
No, quite rarely, as the decreasing 30 week MA indicates that there is still time based resistance to consider, as the fact that it's still decreasing means that it must be a very early breakout, and hence only has a small base after a big decline. Exceptional volume is needed in these cases to avoid getting stuck in either a higher base for many months or a false breakout. Not 2x, but more like 5x average volume minimum. Focus on higher quality patterns if you want to increase your probabilities of success with the method instead of trying to catch a bottom.
RE: Beginners Questions - Red Barron - 2018-05-26
Thanks. A lot of volatile microcaps will seemingly skip S1 altogether and go, what looks like, directly from S4 into S2. One day the 30MA is decreasing with the PPS below it, and the next, the 30MA is abrubtly increasing with the PPS breaking above it. I assume those scenarios aren't likely "buy" candidates in your book. For how long, minimum, do you like to see a stock base before you'd consider entering it, assuming the indicators signal "buy"? 1 mo, 2mo, other? Nowadays, a full cycle of stages doesn't last as long as it used to.
RE: Beginners Questions - Red Barron - 2018-05-26
You've been accumulating shares of a stock in increments over the past year during its S2 run. You trail a stop loss limit order because if the stock crashes hard you don't want your broker to sell any remaining unsold shares below your cost basis. You figure eventually the stock will recover and break above your cost basis in the future so that you may then sell those remaining shares, or decide to hold onto them further. Is using a stop loss limit instead of stop loss a good idea to avoid taking a potential loss if your stock crashes hard and your order isn't able to be filled near the stop? I think Weinstein advocated using just stop losses. But nowadays, with computerized trading, shorting, and naked shorting, your stop loss order might not get filled above your cost basis. This is a concern of mine, especially when investing in volatile stocks/markets. Are there any strategies to deal with the above scenario in a better or alternative way?
RE: Beginners Questions - isatrader - 2018-05-26
(2018-05-26, 06:46 AM)Red Barron Wrote: Thanks. A lot of volatile microcaps will seemingly skip S1 altogether and go, what looks like, directly from S4 into S2. One day the 30MA is decreasing with the PPS below it, and the next, the 30MA is abrubtly increasing with the PPS breaking above it. I assume those scenarios aren't likely "buy" candidates in your book. For how long, minimum, do you like to see a stock base before you'd consider entering it, assuming the indicators signal "buy"? 1 mo, 2mo, other? Nowadays, a full cycle of stages doesn't last as long as it used to.
Personally I like to see at least 6 months in a base at a minimum to consider it, as if it breaks out earlier then you've got the resistance to deal with from people that bought it higher and have held it all the way down and now hoping to get out even. This kind of resistance dissipates with time, as people gradually give up and accept that it's not going to get back to where they bought and take the loss.Â
The V shaped bottom stocks that you are talking about bypass the Stage 1 base and breakout rapidly on strong volume. It's the very strong volume that is the reason that they can move through the resistance, and often you'll then see a higher base form well above the 30 week MA. Personally, I don't trade them until they breakout from a secondary base, as until there's decent consolidation the risk is too great for me in terms of where to position the stop loss. Obviously they can be traded, but where to enter is very difficult, as although a few continue to the moon, the majority fall back hard as the resistance kicks in.
RE: Beginners Questions - kero - 2018-05-27
Same for me. It's impossible to have a clean entry point with V bottoms anyway.
RE: Beginners Questions - isatrader - 2018-05-27
(2018-05-26, 06:46 AM)Red Barron Wrote: Thanks. A lot of volatile microcaps will seemingly skip S1 altogether and go, what looks like, directly from S4 into S2. One day the 30MA is decreasing with the PPS below it, and the next, the 30MA is abrubtly increasing with the PPS breaking above it. I assume those scenarios aren't likely "buy" candidates in your book. For how long, minimum, do you like to see a stock base before you'd consider entering it, assuming the indicators signal "buy"? 1 mo, 2mo, other? Nowadays, a full cycle of stages doesn't last as long as it used to.
One way I imagine that you could trade them would be if you had a very low fee trading account. Then you could do multiple partial entries and gradually build up to a full position size over a month or so.
RE: Stage 2A breakout example - arkyuan - 2018-06-20
(2018-05-03, 11:07 PM)isatrader Wrote: ATTU was highlighted in the watchlist thread just over a week ago on the Tuesday that it made it's Stage 2A breakout attempt
I wanted to post this marked up chart as I thought it was a good example for people learning the methods Stage 2A entry point, and what it looks like when a stock makes a Stage 2A breakout attempt early in the week like it did. As most of the time, to get in at the correct entry point like this, you have to make a judgement based on the stocks daily volume increase on the breakout and the daily closing position on the breakout day, and whether if you extrapolate that volume forward to the end of the week it will meet the 2x requirement.
So in this example the daily volume was three times the daily average (I use the 200 day moving average on the daily volume) on the breakout day, which was a Tuesday, and the weekly volume was around 1x the weekly average. So based on the volume increase on the breakout, and the fact that it had already made 1x the weekly average by the Tuesday, the assumption would be that it would be able to meet it's 2x requirement by the end of the week. So the entry would be made on the assumption of the requirement being met, but then if it wasn't it would be exited at the end of the week.
In this case, it was, and then it has followed through this week with increasing volume, which is what the method looks for after the breakout. So I thought this was a good example to show.
Hi Isatrader,
 Thanks for the example, what about pullback? is there any good pullback examples?
thanks,
Regards,
Ark,