Thanks, and thanks for the input. I don't trade using divergences, but it is always interesting seeing someone else's analysis. For me, I will trade this either way as it will provide a low risk setup. 1.) A break of the 50DMA would signal a good short. 2.) But, I lean towards a rally off the 50DMA and a return to the recent highs - then we will see where we go from there. Thanks for giving me other things to consider.
Maybe it shouldn't, but it does to me system'. Caveat: everything I do is empirically observed and not statistically. Although, if the inside day is only 35% or so of the ATR, then it becomes more significant. I am looking for compression. In fact, one of the scans I am playing with now... and have before.... is filtering for days that are a certain percentage of the ATR. Actually I use the ADR, but except for the stock that has gapped substantially fairly recently, they are similar. But more specifically to your question, the NRID setup I am looking for is similar to the one preceding the big green bar three green bars back on your chart. For several days there was somewhat of a sideways move with some narrowing ranges. Ultimately there was a very narrow range inside day. Although that big green day was a reversal day I suspect. I'd bet without looking at the smaller time frames that the price opened and sold off a bit before reversing and rallying for the day. This would have created a small loss and a large win.
similar to inandlong i screen for % ATR with less than 60% being of interest on an actively traded stock. i also compare the % ATR relative to what the market did that day... if it's christmas eve or thanksgiving friday 90% of stocks r going to be narrow range days because the mkt probably had a narrow range day.
Here is the X chart once again following today's conference call. This chart has the hourly volume on it. Again, I am just regurgitating what I have read and subsequently experienced.... there is no secret to anything I am posting. X broke down earlier in the day without a surge in volume... the break down failed. The volume associated with the two rally bars was not exactly surging either.... maybe a short squeeze? It is not uncommon for price to break from a pattern and retreat back to the pattern before resuming the move. However, there are volume characteristics "classically" associated with a valid pattern break. There should be significantly surging volume on the break followed by decreasing volume with the pullback. This chart doesn't appear that way. Also don't forget.... that last hour's volume is only thirty minutes worth. From this information then, I should conclude that the break out is false and the price should retreat further still. Comments?
You are probably right, but imo one must wait for a next low to be established . If the next low is above 50% of the most recent uprun, retreat will not be so severe. I think you could see it all better on 15 min charts, especially the volume movement .
Interesting day today. Volume picked up, and MSSN broke below the 50DMA but recovered to close just above it, and form a hammer (by my definition, anyway). I know it is now out of the category being discussed in this thread, but wanted to update the original post.
Actually newtoet, because the authors of the NRID setup consider it to be a multi-day trade, today's action is day #1, and the expectation should be for more down days to follow. It will be interesting to see how this works out. Thanks for the update.