Beginners Questions
#25
The breakups and breakdown lists - is this break of 30ma (simple or weighted?) or of the 150 or 200 daily sma?

Thanks
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#26
(05-09-2013, 10:16 PM)bluemosaic Wrote: The breakups and breakdown lists - is this break of 30ma (simple or weighted?) or of the 150 or 200 daily sma?

No, the breakouts and breakdowns are determined using point and figure charts with traditional settings. See Post: #41 here: http://stageanalysis.net/forum/showthrea...531#pid531 and Post: #43 [url]http://stageanalysis.net/forum/showthrea...533#pid533[/url] for a full explanation.

They are very simple double top breakouts (breakouts above previous column of Xs) and double bottom breakdowns (breakdowns below previous column of Os), and are not picks. The idea of the daily scan of these is to give me a small list of breakout stocks to then manually look through in my Weinstein charts to see if any match the criteria we are looking for. For example on today's list you can see that BSX (Stage 2B) is a candidate for a trader pick on a pullback towards support and DOW (Stage 2) is a candidate for a potential trader and investor pick as it's breaking out of big one year range. Attached is a daily chart of BSX and a weekly chart of DOW.


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isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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#27
I am trying to understand the best approach to recognising signs of accumulation during a stage 1 phase or during a stage 2 trend when the trend pauses in a range -targeting the trader time frame. I currently look at the price movement ie. How far it moves compared to volume. If volume around or above average but price staying approx. Same then I see this as accumulation . Is this correct? Anything else I should look for? What about using level 2 price info? Thanks
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#28
(05-18-2013, 10:14 AM)bluemosaic Wrote: I am trying to understand the best approach to recognising signs of accumulation during a stage 1 phase or during a stage 2 trend when the trend pauses in a range -targeting the trader time frame. I currently look at the price movement ie. How far it moves compared to volume. If volume around or above average but price staying approx. Same then I see this as accumulation . Is this correct? Anything else I should look for? What about using level 2 price info? Thanks

This is not something I can give you much help on, as volume is one on the trickiest measures to gauge, as the large players use a variety of methods to hide their large transactions during consolidation periods in order not to move the price too much before they've filled their total amount that they need to fill.

A newish method, which we've talked about a bit on here and the old thread before called "Effective Volume" was developed by Pascal Willain to try to uncover what the large players are doing during those periods, and uses a technique to separate the individual trade data between the large players and the small players. It's quite complicated and he wrote a whole book about it called "Value in Time", but there is one website that has it available to use on US stocks for free - which is chartmill.com, and so can sometimes help you to see when a stock is being accumulated or distributed by large players.
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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#29
Sounds like I am trying to over complicate this analysis then. So what should I be looking for when assessing breakouts and pullbacks with trend? Just increase of volume ?

(05-18-2013, 08:29 PM)isatrader Wrote:
(05-18-2013, 10:14 AM)bluemosaic Wrote: I am trying to understand the best approach to recognising signs of accumulation during a stage 1 phase or during a stage 2 trend when the trend pauses in a range -targeting the trader time frame. I currently look at the price movement ie. How far it moves compared to volume. If volume around or above average but price staying approx. Same then I see this as accumulation . Is this correct? Anything else I should look for? What about using level 2 price info? Thanks

This is not something I can give you much help on, as volume is one on the trickiest measures to gauge, as the large players use a variety of methods to hide their large transactions during consolidation periods in order not to move the price too much before they've filled their total amount that they need to fill.

A newish method, which we've talked about a bit on here and the old thread before called "Effective Volume" was developed by Pascal Willain to try to uncover what the large players are doing during those periods, and uses a technique to separate the individual trade data between the large players and the small players. It's quite complicated and he wrote a whole book about it called "Value in Time", but there is one website that has it available to use on US stocks for free - which is chartmill.com, and so can sometimes help you to see when a stock is being accumulated or distributed by large players.
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#30
(05-18-2013, 09:24 PM)bluemosaic Wrote: Sounds like I am trying to over complicate this analysis then. So what should I be looking for when assessing breakouts and pullbacks with trend? Just increase of volume ?

On a trader breakout, according to the method you should be looking for a strong volume day on the breakout. Typically at least 3 times the recent average volume on the daily chart and a strong close above the breakout level near the high of the day ideally. You also want to see the weekly volume at at least 2 times the previous four weeks average volume.

Pullbacks are the opposite, in that you want to see the volume decrease when it pulls back towards the support and stabilises.
isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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#31
(05-18-2013, 09:32 PM)isatrader Wrote:
(05-18-2013, 09:24 PM)bluemosaic Wrote: Sounds like I am trying to over complicate this analysis then. So what should I be looking for when assessing breakouts and pullbacks with trend? Just increase of volume ?

On a trader breakout, according to the method you should be looking for a strong volume day on the breakout. Typically at least 3 times the recent average volume on the daily chart and a strong close above the breakout level near the high of the day ideally. You also want to see the weekly volume at at least 2 times the previous four weeks average volume.

Pullbacks are the opposite, in that you want to see the volume decrease when it pulls back towards the support and stabilises.

Yeah thats the tricky part, making your entry at the best pullback. So know I know to wait for a pullback near the support and stabilization. However, how long is the stabilization period usually? Does the pullback entry matter for one who is doing this investor method?
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#32
(05-22-2013, 06:38 PM)Sapphire Wrote: Yeah thats the tricky part, making your entry at the best pullback. So know I know to wait for a pullback near the support and stabilization. However, how long is the stabilization period usually?

It's a good question, but unfortunately there is no definite answer. In my Q&A with Weinstein recently he said: "I suggest doing secondary buying when a stock pulls back close to the breakout point, and you then see it stabilize near that level."

So it's a judgement call on whether you think the stock has stabilized and something for my list for us to explore on here. Personally, I tend to identify the area of support and then watch for a stock to make a new potential swing low in that area. I determine this by the stock making higher close and then closing the following day above the previous days high. i.e. it's stopped making lower highs and has made a higher high, as well as a higher close, and so has in the very short term at least stabilized a little. There are many other ways, but that's what I look for, as well as obviously watching what the broad market is doing, as it has very big effect on most stocks intra-day movements.

(05-22-2013, 06:38 PM)Sapphire Wrote: Does the pullback entry matter for one who is doing this investor method?

The pullback entry is a major part of the investor method (point B on the below investor chart), as it is used as the secondary buying point where an investor will buy the second half of their position (See attached diagrams from the book).

[Image: attachment.php?aid=1293]


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isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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