Technical Analysis DOES work.

Discussion in 'Technical Analysis' started by oddiduro, Jan 9, 2004.

  1. BUT, the longer the timeframe, the better.

    This is a chart on the daily timeframe. It was culled using indicators from the weekly frame. All of the indicators came out of the book Bollinger on Bollinger Bands, which is a very good book for explaning TA.

    This stock looks like a buy on the break of friday's high.

    Since this is a training excercise, all indicators will be fully explained, and all input will be welcome, especially constructive criticism.

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  2. H2O


    I don't see it as a buy.
    I will try to give you my reasons (only my opinion)

    - stock has been in a downtrend since november. (you can draw a resistance line over the tops of the retracements)
    - stock comes from approx 46 and went down while volume is picking up on the way down.
    - stock has completed a nice head and shoulders with the neckline at approx 41 (left shoulder at 47 in september, head at 50 in oktober, right shoulder at 46 in december)
    - MACD is below zero and fast MACD is losing strenght

    Just my 0.02
  3. newtoet


    I think it could be a buy on a break of today's high for a BOUNCE, but not a long term hold. Target would be the last swing high.

    Good luck.
  4. This is a very confusing trade. Last day is closed below
    lower bolinger band (short), but there is divergance in the
    momentum and money flow and price (long).

    I think next few day will be downtrend until trend
    reverses after that. So if you want to be long, better
    wait few days more to confirm your prediction by
    breaking uper trendline
  5. It appears that the downtrend is losing strength, so the downward momentun is slowing, which means that buyers are coming in, what do you think?

    I also see a triple bottom, and relative volume on the last day was lower than yesterday, not too reliable because it was Friday, though. Friday was also an inside day.
  6. Bollinger trades are supposed to be held until the tag of the upper band, I believe.

    Sometimes price will tag the middle band and make a new absolute low, but it will be a higher relative low.
  7. That's what I would do as well. Maybe tuesday or wednesday.
    Just a thought.
  8. kowboy


    I am not skilled in TA, but here's my 2c. for feedback.

    Indications favorable for a short term bounce up: The TRIN after 10:30 am today indicated some modest selling and the general market closed lower. Yet the stock did not drop below Thursday's low which is positive. There is a five day volume crescendo and volume dries up Friday indicating less willing sellers (although a low volume Friday can skew this) and a reversal up is possible.

    This may be a swingtrade or intraday play on the breakout with an entry above Friday's high for a short bounce up. But only if the market direction would be positive and the TRIN confirming. If the trend is down, I would wait for confirmation before going long.

    I am not really comfortable long on this as theoverall trend has been down. I would prefer one that was ready for total capitulation or a total breakout, but these are hard to find. Who am I to say, as I am learning all the time.
  9. Only price matters
  10. :confused: If your looking to buy, why mess with a chart like this when there are so many out there in a nice uptrend?
    #10     Jan 10, 2004