Wow, that was really eye opening. So what you are saying is, the volume should match the pattern of the price. As in the following chart? In fact, SONS is up 9% since it broke out on 11/20/2006. Is it too late to enter now?
sorry was looking at the last 2 charts...I wouldn't own any gambling stocks this late in the cycle, but it is a bit soon to short imho
Late in which cycle Frank? The gambling cycle seems tgo run through recessions like a knife thru butter.
To My2Cents: How does this chart (PPL) look? The volume very clearly matches the chart pattern. Also, volume wise, DYN looks pretty good as well:
PPL Corp. rallied to an all-time high in July and stalled out. Two selloffs below the 50-day moving average since that time found willing buyers and let the stock build a solid base for a run back to the highs. The sharp rally after Thanksgiving day has finally lifted price back into that key level. This pattern has negative characteristics because selloffs within the correction show above-average volume. This means accumulation is weak, compared to surging price. It's best to tread lightly with this divergence and wait for fresh buyers to support the uptrend. A move above $35.50 should have major legs after we see a few buying surges. From Street.Com> ~ Stoney
istock- Ask me no questions, I'll tell you no lies. Please don't ask me what I think about a particular chart because then I'll have to bill you and my chart opinions are not cheap. Personal objectivity is the goal here. Besides if I were to give you my opinion for free you wouldn't learn anything. I will say this, you are looking into the right industry groups. However, you are looking too closely at the individual charts. Back up and I mean literally back up. Expand the chart, move away from your desk, and look at it from across the room. I know this sounds silly but try it. If you don't see anything that's because there's nothing to see. A good chart, long or short, will stand out. When you look at a chart remember that the chart is telling you a story. If you are able to pick up on the right clues the chart will tell you what to expect in the months ahead (nothing like stating the obvious). I wrote an opinion this time last year on Haliburton. My thesis ran along the lines that the situation overseas would radically shift by June of this year and be detrimental to the share price. What caught my attention was the reaction by HAL on some rather benign news. I witnessed in the stock a phenomenon which I call a "volatility shift". A lot of money had been made in the stock since 2003 and the large bag holders were getting nervous. Fact: "Insiders" buy options for leverage. One of the components of a volatility shift was beginning to unfold, an unusual amount of call buying was occurring in the stock after it had broken an extended uptrend. The shift is a precursor to a blow off top and allows for the major shareholders to sell into a rising market. Quite naturally you have to get the rally started and no better way than to explode call volume and have some pundit run with the news. As soon as the story hits the rumor pages of Business Week all the real money has already been made and that last lift gives the sellers one last chance to clean out their positions at the highs. As I look at the current chart the story I see doesn't portend well for anyone long this stock, although some serious money could probably be made on the short side. I'm just hypothesizing here on what could make this stock completely break down. For example, it wouldn't surprise me to see this company come under the scrutiny of Congress. I can envision some legislators in an effort to make a name for themselves lead an investigation into all the missing cash from the no bid government contracts. Now that's something that would fulfill the current distribution I see in this stock. Wouldn't it be something if that were to happen? I could be a guru and have a future as a puppet head on CNBC! To quote Rod Stewart, "Every picture tells a story story don't it?" Just, my2cents
Hey my2cents it's funny I've never taken a lesson in chart reading or read a book on it or even know what any of this crap means. Relative Strength is easy enough to figure out, Dito money flow, up volume, I'll lay in price channel, but I've always told people who get so wrapped up in the nuances of it pretty much what you say-" Back up and I mean literally back up. Expand the chart, move away from your desk, and look at it from across the room. I know this sounds silly but try it. If you don't see anything that's because there's nothing to see. A good chart, long or short, will stand out. " - That was incredibly well put. I'll add that a promising chart can look many different ways; the comeback story vs the accelerating new highs, the long base, the snap back- the beauty of a good chart is sublime. Remember Straight up is not good either! It's very much hard to describe, but like pornography you just know it when you see it. Will either of you two gents take a 2 year look at Texas Industries TXI. Despite the 1 month run- Me likey!
hi, i'm new to this site and have what might be a newbie question for some older timers. i trade options and have been using TC2000 charting service for years. it has a very good selection of technical indicators which many traders use to pick and time their purchases. since all indicators lag the market, i do not think it is wise to rely heavily on technical analysis. i think there also needs to be factored into the equation some information on fundamentals. do any of you use sites that have fundamental analysis of stocks, such as Business Week Online, or Yahoo Finance? i would appreciate sharing.
Ok I am learning to see the story behind the charts. Actually I manually went through hundreds of charts and found the following to be visually appealing: NI ATI I understand that chart reading is an art rather than a science. I welcome all kinds of constructive criticism and insights.