New investor here, got a novice's chart for you (HAS)

[Spongle]

Hey ppls

I'm new to this investing game (apologies if this thread is in the wrong place) and my obsessive compulsive brain just can't stop analysing charts (and doing maths and writing jungle lol).

Got about $1500 to start investing with just gotta wait for my commsec acc to open...

Anyways here's a chart (or should I say a stock) that looks quite interesting:


OK so I see a definate uptrend that has been cylcling for 3months. I've added horizontal lines where the troughs touch the (diagonal trend) support line to illustrate the price differences at those intervals on the gradient. Thus far the mean is about .875% per week in the support line.

So basically theres is a low early support line (or at least a price line which points toward the inclined true trending support line) in red at the very bottom (which i have made into a triangle for some reason... bloody vectors on the brain lol) and the three blue ones which do the same at the acending troughs.

Now, where the parralell trend support and resistance lines turn green this is where i expect the trend to (at least) reach ie where the upper 3 red horizontal lines, the lower 2 pointing towards my estimation of the ascending troughs and the top line being a kind of ceiling resistance point.

I havent come to these conclusions purely thru TA but FA also + the candles seem to indicate this trend should continue. (have also looked at the chart over its lifetime for a bit of perspective)

So anyway i see 4 possibilities:

5% increase over 10days (approx), 7% increase over 3wks, (the most likely results, at least one of them anyway), 9% over at least a month (much less likely) or finally a slight increase then a reversal or at least a sideways thingy (unlikely in the short term)

What do you lot reckon??? Im i completely off??? Any advice would be greatly appreciated!

Cheers

 

[tech/a]

Re: New invester here, got a novices chart for you (HAS)

In my view

This is sruggling in a corrective move.
We have A and B to the first legs and C will be equal (or close) to the length of A.
Volume is lack luster and resistance is clear,around the $50 mark

The very high volume lower pivot bar was the entry signal for this trade---not now---too late. (The bar at 14/1

When trading retracements look for exhaustion and extreme bars to set your trade from.

 

[Spongle]

Re: New invester here, got a novices chart for you (HAS)

Thank you most appreciated!

So basically with volume as high as that and with the heavy shaded blue candle closing high you can be fairly certain the trend will increase (or reverse?) from there?

Also I'm assuming that if you miss the boat at that particular point I suppose it's too risky to get in on it after the first new peak has dropped and risen again (feb 3) beacause there is insufficient evidence to prove a support line? (or enough of one)

Just out of curiosity what is your (or anybodys) opinion re: the pending area between march 15ish and april the 15 or round about. Do you think it would reach the resistance point based on the info that's there???

Thanks heaps for the help, i really know bugger all about this stuff so everything helps

 

[tech/a]

Re: New invester here, got a novices chart for you (HAS)

Highly unlikely.
Retracements in a corrective move "Normally" retrace 50-60% of the length of A

IE 50% of $50-42.50.
Before falling back .

The reason I think this is a corrective move in a new down trend correction is that the wave B that is now in force is so long.
If it were bullish it would have corrected and moved to new highs well before now.

 

[Spongle]

Re: New invester here, got a novices chart for you (HAS)

Cheers

Apologies to the mods if I have inavertantly broken any rules on here. Basically trying to ascertain probabilities re: trends which can be a challenge when one studies maths and harder sciences where logic and deductive reasoning can be applied to yield a definate answer.

I've been looking at alot of past info on a heap of charts but when you know whats happened purely because it has in fact happend already then little get's learnt (by me anyway).

I'm still a bit shady on the rules... i'd like to talk about what may happen on a particular chart/stock but only to see I've calculated probabilities 'correctly' which is probably not possible anyway haha

Just keen to learn

 

[professor_frink]

Re: New invester here, got a novices chart for you (HAS)

you've not broken any rules, carry on talking about the company all you want.

What you will most likely find out as you go along though is that there are no definitive answers you can come to in regards to trends.

Trading isn't a 'science'

 

[tech/a]

Re: New invester here, got a novices chart for you (HAS)

you've not broken any rules, carry on talking about the company all you want.

What you will most likely find out as you go along though is that there are no definitive answers you can come to in regards to trends.

Trading isn't a 'science'

Prof

My Son Kris
is a Doctor of Physics
We are doing a bit of work on somethings and both of us may well disagree with you on that.

 

[shyguy]

Re: New invester here, got a novices chart for you (HAS)

I don't mean to derail this thread but I am trying to learn more about waves and was wondering if someone here could repost the chart with the waves added in so i can see if my assumptions are correct...?

 

[Gringotts Bank]

Re: New invester here, got a novices chart for you (HAS)

IMO, trading can be done as an art or a science. I've done both, and so far the art is more profitable for me. I gave the science side of it a very good go (6 years of continual coding, testing, tweaking). Perhaps if I had the sort of ability that Thomasz of AB has, I'd be speaking differently. The other thing is system trading just felt wrong somehow - can't explain it better than that. Even when I was doing well it felt wrong.

 

[professor_frink]

Re: New invester here, got a novices chart for you (HAS)

Prof

My Son Kris
is a Doctor of Physics
We are doing a bit of work on somethings and both of us may well disagree with you on that.

I will happily have a large slice of humble pie and retract my statement if you succeed

The problem as I see it is that the very act of taking advantage of, or publishing any kind of irrefutable truth about market trends will have an impact on the very system you were measuring to begin with, the edge you find may not be there a few years after you go public with it.

 

[Spongle]

Re: New invester here, got a novices chart for you (HAS)

Personally I would love it if technical analysis was a pure irrefutable truth, would probably make all this somewhat easier although not as much fun.

It's seems obvious to me (a complete novice re investment) that short - medium term trends repeat themselves. People as a group are predictable, they're behaviour follows a pattern which can be quantised to some degree... just not perfectly.

Well keen to get this stuff underway. Not working at the mo so i may as well immerse myself in it really...

 

[Gringotts Bank]

Re: New invester here, got a novices chart for you (HAS)

I'd suggest 'momentum' as a technical edge, if you want something to look into. I found nothing better than that for system trading. It's also 'organic' in that it reflects real trader behaviour.

The other thing is that Indices can be predicted 5 days ahead (binary style up/down) fairly well with neural nets.

 

[skyQuake]

Re: New invester here, got a novices chart for you (HAS)

The other thing is that Indices can be predicted 5 days ahead (binary style up/down) fairly well with neural nets.

I think i read something very similar a long time ago, but dismissed it. Do you have the source of that?

 

[tech/a]

Re: New invester here, got a novices chart for you (HAS)

I will happily have a large slice of humble pie and retract my statement if you succeed

The problem as I see it is that the very act of taking advantage of, or publishing any kind of irrefutable truth about market trends will have an impact on the very system you were measuring to begin with, the edge you find may not be there a few years after you go public with it.

I believe that what your actually studying with T/A is Crowd Behavior.
Crowds do have a way of repeating behavior.
They swing to extremes then return to the mean. They do it with monotonous regularity.

As for edge---there are buildings full of Techs punching out algos for massive companies all day every day.
They have their edge and its based around Mathematical models (Science)

Not saying its the be all end end all---but if you had the resource you'd certainly use it.(Science)

Shyguy
Here is a weekly chart of HAS which is labelled more accurately in my view.

Click to enlarge

 

[Garpal Gumnut]

Re: New investor here, got a novices chart for you (HAS)

Mate, its always nice to see a chart , in three time periods, long , medium and short.

You will find on ASF and Hotcopper that most commentators are focussed on the short term, even those who are considered "gurus".

So,

Repost your original chart with a long term say, 5-30 years, a medium, say 1-5 years and the last 1-12 months.

Monthly, weekly and daily.

Now some stocks may not have that history, but you need to adjust that mindset for your stock.

What is happening to a stock over the past 6mo means zilch to me, as a chartist.

gg

 

[Logique]

Re: New investor here, got a novices chart for you (HAS)

Yes very sensible.
Spongle, you'd also need to look at a range of technical indicators. While the upward candle on 3 Feb is very attractive in isolation, the volume is not increasing with price, so caution.

 

[tech/a]

Re: New invester here, got a novices chart for you (HAS)

I believe that what your actually studying with T/A is Crowd Behavior.
Crowds do have a way of repeating behavior.
They swing to extremes then return to the mean. They do it with monotonous regularity.

As for edge---there are buildings full of Techs punching out algos for massive companies all day every day.
They have their edge and its based around Mathematical models (Science)

Not saying its the be all end end all---but if you had the resource you'd certainly use it.(Science)

Shyguy
Here is a weekly chart of HAS which is labelled more accurately in my view.

Click to enlarge

View attachment 41950

I think a look back of 5 yrs is sufficient.
this is a weekly chart.
Price without increase in volume is a good thing.
You dont need volume to have a strong and continued rising price.
Volume in an up move "CAN" indicate supply coming in.

GG
I would be really interested in some of your charts labelled up to get a perspective of how "A Chartist" analyses a chart??

I'm just a GURU.

 

[Reasons]

~

Hey ppls

What do you lot reckon??? Im i completely off??? Any advice would be greatly appreciated!

Cheers

Hi Spongle

How about we look at the chart completely differently (see below), because that is what happens all the time in chart land as you can see from the various responses above. The way that I look at this chart is that you have a strong resistance/support line at roughly $46. I have put arrows along it so you can see where I see some of the support and resistance evidence.

I am pretty lazy and not very bright, so I have to keep my technical trading world interpretations and plans as simple as I can.

For some reason (and I am too lazy to care) $46 causes the price to often hit its head on resistance and go down again and at other times it lands on its feet and finds support and then goes up.

So what are we now seeing in the price action; which is the most important element. The resistance at $46 was broken and the price went higher over the last couple of weeks and has now come back down, tested that resistance and used it for suppport and moved up slightly again.

The most important thing about reading the price action is determining if it is making higher highs and higher lows in this instance as you are thinking about going long, as this is the most basic and easy way to determine if you have an uptrend or a downtrend (I generally ignore most of those sloping trend lines because half the trading/investing population don't see them anyway, but in this case there is an easy one to see and I have drawn it and If I was trading this I would watch it if the price action approached it, because I know on probability that lots of people will be doing the same.

The trick about reading the price action for higher highs and higher lows is not to get bogged down with every little bump. I am too laid back to look too hard and as long as the price action is generally behaving on the obvious swings, I am happy. In looking at the price action I don't like too many long bars as this suggests amateurs are in play and occassionally this share can do ~5% daily bars, which are nasty if you are on the wrong side of one.

Lastly on the price action, we have an indecision bar on the most recent bar, neither the bulls or bears could win the day, and the previous 2 bars are not that positive either, but we have been having some serious global strife and there is an opportunity here in theory. There are no price rejection candles on the turn either to give us more confidence about the move up (a long downward tail with a little cross or head at the top). I hope you can now see why traders will say they prioritise price action before indicators, as it tells you a lot about the next possible move (others will see more stuff and that's fine).

I use the MACD and RSI (RSI is for confirmation really that the MACD is not goofing off on me - don't need 2 bludgers, the MACD and me) to show me if there is divergence. Divergence is if the MACD and RSI are moving downwards, but the price action is doing the opposite or vice versa. In this case it is convergent, which means it is following the price action up and so nothing is unusual here and I know my odds are better for getting my trade setup right. If I saw divergence I would NOT enter the trade. I also confirm the same MACD and RSI on weekly and monthly charts to ensure they are not doing the opposite to the daily (if the weekly was divergent, again I would not enter the trade).

I will flag that I also use moving averages, but they look acceptable (not brilliant) and I did not want to clutter up the screen or get into that detail here.

Although I don't use it greatly, I will also flag that the volume is decreasing as the price goes up and this flags a lack of enthusiasm at some level, but if you go back in history, it is not very indicative on this share anyway IMO.

Don't forget to check for planned dividends or planned announcements about company performance prior to entry that might affect the price.

So, lets assume we you were happy to risk the trade, but were not sufficiently confident of the outcome (BTW - if that was the case then you should not be taking it), you have a few choices for your stop loss. The easy one in this present volatility is to put it one cent under the 3rd to last bar, an alternative is to use the up-sloping trend line, the 3rd, but probably lesser one is the rough support at $44.

Your target is $50, but that target is not totally clear with some possible resistance at around $47.50 - $48 (look back to Oct/Nov), which could means some quick stop loss management.

Your entry is as close to the present bar price as you can, so lets say you got in at $46.50.

Your stop is tight at 45.50 as you don't trust the market volatility.

You profit target is $50.

Your win/loss ratio is 3.50:1 and 1.5:1 if you had to bail at $48.

If you bought 220 ($10K) at $46.50 you could make ~$770 with a downside risk of ~$220 at the best win/loss scenario above.

In summary, take it from someone who is pretty slow off the mark, keep your trading ideas SIMPLE. Look for what everyone else is likely to see and ignore all the claptrap associated with clever ideas in trading. If you see any complexity, run like the wind in the other direction. Good trading ideas and strategies are always simple.

Best of luck with your decision

Cheers

 

[Spongle]

Re: New invester here, got a novices chart for you (HAS)

In my view

This is sruggling in a corrective move.
We have A and B to the first legs and C will be equal (or close) to the length of A.
Volume is lack luster and resistance is clear,around the $50 mark

The very high volume lower pivot bar was the entry signal for this trade---not now---too late. (The bar at 14/1

When trading retracements look for exhaustion and extreme bars to set your trade from.

Was wondering what you were referring to with A, B and C and 'legs' also.

Thanks

 

[Spongle]

Re: ~

Hi Spongle

How about we look at the chart completely differently (see below), because that is what happens all the time in chart land as you can see from the various responses above. The way that I look at this chart is that you have a strong resistance/support line at roughly $46. I have put arrows along it so you can see where I see some of the support and resistance evidence.

I am pretty lazy and not very bright, so I have to keep my technical trading world interpretations and plans as simple as I can.

For some reason (and I am too lazy to care) $46 causes the price to often hit its head on resistance and go down again and at other times it lands on its feet and finds support and then goes up.

So what are we now seeing in the price action; which is the most important element. The resistance at $46 was broken and the price went higher over the last couple of weeks and has now come back down, tested that resistance and used it for suppport and moved up slightly again.

The most important thing about reading the price action is determining if it is making higher highs and higher lows in this instance as you are thinking about going long, as this is the most basic and easy way to determine if you have an uptrend or a downtrend (I generally ignore most of those sloping trend lines because half the trading/investing population don't see them anyway, but in this case there is an easy one to see and I have drawn it and If I was trading this I would watch it if the price action approached it, because I know on probability that lots of people will be doing the same.

The trick about reading the price action for higher highs and higher lows is not to get bogged down with every little bump. I am too laid back to look too hard and as long as the price action is generally behaving on the obvious swings, I am happy. In looking at the price action I don't like too many long bars as this suggests amateurs are in play and occassionally this share can do ~5% daily bars, which are nasty if you are on the wrong side of one.

Lastly on the price action, we have an indecision bar on the most recent bar, neither the bulls or bears could win the day, and the previous 2 bars are not that positive either, but we have been having some serious global strife and there is an opportunity here in theory. There are no price rejection candles on the turn either to give us more confidence about the move up (a long downward tail with a little cross or head at the top). I hope you can now see why traders will say they prioritise price action before indicators, as it tells you a lot about the next possible move (others will see more stuff and that's fine).

I use the MACD and RSI (RSI is for confirmation really that the MACD is not goofing off on me - don't need 2 bludgers, the MACD and me) to show me if there is divergence. Divergence is if the MACD and RSI are moving downwards, but the price action is doing the opposite or vice versa. In this case it is convergent, which means it is following the price action up and so nothing is unusual here and I know my odds are better for getting my trade setup right. If I saw divergence I would NOT enter the trade. I also confirm the same MACD and RSI on weekly and monthly charts to ensure they are not doing the opposite to the daily (if the weekly was divergent, again I would not enter the trade).

I will flag that I also use moving averages, but they look acceptable (not brilliant) and I did not want to clutter up the screen or get into that detail here.

Although I don't use it greatly, I will also flag that the volume is decreasing as the price goes up and this flags a lack of enthusiasm at some level, but if you go back in history, it is not very indicative on this share anyway IMO.

Don't forget to check for planned dividends or planned announcements about company performance prior to entry that might affect the price.

So, lets assume we you were happy to risk the trade, but were not sufficiently confident of the outcome (BTW - if that was the case then you should not be taking it), you have a few choices for your stop loss. The easy one in this present volatility is to put it one cent under the 3rd to last bar, an alternative is to use the up-sloping trend line, the 3rd, but probably lesser one is the rough support at $44.

Your target is $50, but that target is not totally clear with some possible resistance at around $47.50 - $48 (look back to Oct/Nov), which could means some quick stop loss management.

Your entry is as close to the present bar price as you can, so lets say you got in at $46.50.

Your stop is tight at 45.50 as you don't trust the market volatility.

You profit target is $50.

Your win/loss ratio is 3.50:1 and 1.5:1 if you had to bail at $48.

If you bought 220 ($10K) at $46.50 you could make ~$770 with a downside risk of ~$220 at the best win/loss scenario above.

In summary, take it from someone who is pretty slow off the mark, keep your trading ideas SIMPLE. Look for what everyone else is likely to see and ignore all the claptrap associated with clever ideas in trading. If you see any complexity, run like the wind in the other direction. Good trading ideas and strategies are always simple.

Best of luck with your decision

Cheers

Thanks Reasons

I didn't even notice that the $46 mark was a joint support/resistance point.

re: indicators RSI and MACD are 2 that i am more familiar with but still know very little about them... will have to do some more research.