Potential Breakout Alerts!

[tech/a]

Cam
In my view you are reading the chart in a completely opposite way than I would
The bars you have marked I look for in a consolidation
They indicate no supply
Which is exactly what I want to see
This has broken out just as I would expect

The coupling of low volume in some circumstances ias weakness is totally incorrect. In my view
A trap many who dabble in VSA fall into

Conversely high volume can and does indicate weakness in context of some charts

Correct reading is VSA flies squarely in the face of common logic

Have a look at CONTEXT
This is where you'll see the difference

If your going to have consistent success you need to study and understand this

 

[tech/a]

I think the best I can offer to those interested in VSA is think ONLY in terms of SUPPLY
Stock ONLY move relative to supply.

If large amounts of supply swamp demand then holders will seek lower prices to get out
This is generally followed by wide range bars and volume.

If supply is consistently stronger than demand then price will drift lower until supply withdraws.

If supply withdraws and holders hold then price will drift upward as new holders find sellers at higher price.

If supply cannot meet demand as supply withdraws to almost zero ( eg Positive announcement ) where holders are of the same mind as buyers --- thinking it's a good idea to hold this stock
Price will rise quickly on high wide range and high volume.

Until supply feels the price is right to take profit.
Here is where consolidation appears---both sides agree for a time -- within a range.

This change in perspective will go a long way toward changing your thinking from the generally accepted and un informed view of how and why volume and range effect an instruments price.

FEAR is a much stronger emotion than GREED.

While there is more to chart reading than the above the shift in thinking is a must!

 

[Cam019]

Hi Cam,
Great reply, I really like your analysis, it makes a whole lot of sense, particularly about the thought processes of other market participants, I thought it looked a bit like the recent B/O of LNG in mid January, but it does not have the drying up of volume seen in that case or the higher lows or as many touches of the resistance line. What it does have is momentum over the medium term.

I would love to see more of your analysis skills, (will have to do a post search) What are you trading atm and why?

Wyatt

Thanks Wyatt. I like to use opportunities like this to explain my analysis and hopefully get some feedback on what has been correct and what still needs work. It's always good to get some feedback/guidance from more experienced traders to help me hone my skills. I'm currently in the beginner stages of educating myself in the art of VSA. I'm not really trading too much currently, but if I had to but a label on it, it would be small cap stocks on the ASX using VSA.

Cam
In my view you are reading the chart in a completely opposite way than I would
The bars you have marked I look for in a consolidation
They indicate no supply
Which is exactly what I want to see
This has broken out just as I would expect

The coupling of low volume in some circumstances ias weakness is totally incorrect. In my view
A trap many who dabble in VSA fall into

Conversely high volume can and does indicate weakness in context of some charts

Correct reading is VSA flies squarely in the face of common logic

Have a look at CONTEXT
This is where you'll see the difference

If your going to have consistent success you need to study and understand this

Thanks for commenting and critiquing tech/a. I really appreciate the time taken to ultimately guide me in the right direction.

I think the best I can offer to those interested in VSA is think ONLY in terms of SUPPLY
Stock ONLY move relative to supply.

This will stick with me!

 

[Wyatt]

Thanks Tech/a for the sage advice as always. Your commentaries on trading and psychology are a great asset to all here on ASF.
What are your views on market regime changes, IE most trading style go in and out of sync with the market overall, do you hunt in hot sectors , trying to jump on the latest craze or simply wait for the cream to float to the top or have a combination of complementary models.
Wyatt

 

[tech/a]

Thanks Tech/a for the sage advice as always. Your commentaries on trading and psychology are a great asset to all here on ASF.
What are your views on market regime changes, IE most trading style go in and out of sync with the market overall, do you hunt in hot sectors , trying to jump on the latest craze or simply wait for the cream to float to the top or have a combination of complementary models.
Wyatt

Go where the money is and go there often.

Searches tend to find the performers and often you'll
see a sector coming to the front before the index of that sector
showing strong signs of bullishness.

Timing may not be perfect but you'll have them on watch list if not
trading them.

One thing I have done more of this year is culling stock
which doesn't jump out of the gates. Being aware of shorter timeframes.

With so many prospects I have no problem finding others and putting
stock back on watch lists.

Letting runners run and culling non performers has shown a drop in
winners but a vast increase in winning trade % V Losing trade %.

Very few in comparison to those found are left to run.
Losses are either brokerage or at worst 1% of capital.
Even though a 2% stop is set for position sizing ONLY.

 

[Cam019]

I personally wouldn't be trading a break out from this chart until I got some more information but that's just me and who knows, I could be completely wrong!

Today, to satisfy my curiosity, I checked the chart for MSB. What do you know... I was completely wrong!



So if I take take tech/a's advice and think only in terms of supply, what can I see? Friday (3rd last bar) we have a high volume wide range up bar closing slightly off the high which indicates the majority of supply has withdrawn, but not all, due to the bar closing off the days high. Mondays bar. Up bar on a narrow spread with reduced volume. Not 100% sure, but it seems like supply is withdrawing enough for supply to be weaker than demand, hence the close up from the previous day. (What confuses me though is the fact that the bar closed very close to the low of the day, which would indicate supply in the market). Today's bar is a wide range up bar on high volume indicating supply has completely withdrawn allowing the bar to close on a high.

 

[tech/a]

Today, to satisfy my curiosity, I checked the chart for MSB. What do you know... I was completely wrong!

View attachment 70228

So if I take take tech/a's advice and think only in terms of supply, what can I see? Friday (3rd last bar) we have a high volume wide range up bar closing slightly off the high which indicates the majority of supply has withdrawn, but not all, due to the bar closing off the days high. Mondays bar. Up bar on a narrow spread with reduced volume. Not 100% sure, but it seems like supply is withdrawing enough for supply to be weaker than demand, hence the close up from the previous day. (What confuses me though is the fact that the bar closed very close to the low of the day, which would indicate supply in the market). Today's bar is a wide range up bar on high volume indicating supply has completely withdrawn allowing the bar to close on a high.

Perhaps I can help.

After a wider range breakout bar the next bar tells us a lot
This small squat bar is the biggest green light you'll ever see.

Volume was moderate and even so supply couldn't make a dent.
I look for how far the next bar protrudes into the breakout bar
This ideally should be less than 25% and in this case it's about 10

Large range breakout bars in fact most large range bars will be tested
Or you'll see an inside day. How this occurs tells us what is highly likely
To happen next.----it happened.

So tomorrow the dance continues.
We expect to see testing of the breakout continuation.
At some point holders will consider the stock to be at a good
Price to sell.
It will be clear as to whether buyers think it's a good buy.

Watch for high volume it will be weakness and could be temporary.
Watch for rising on low volume --- no supply.

So still bullish but cautious.
Now I would be at B/E in the trade if I was in it.

I'm now interested in maximising profit.

 

[tech/a]

Price is powering along without supply having much of an effect yet.
price is gapping on open and closing on its high. Volume is increasing but not
at a rate to be alarmed at. You have to be alert to maximise your profits on these
It will turn on a dime. I low volume consolidation would be best at this point.
A high increase in volume and a reversal bar will not bode well.

If It gaps open I would have a stop at $2.04. If that's taken out then in my view
this run is over for a while.
If it simply reverses my stop would be a tick below todays low.(Could have an inside day).

This is an interesting chart and a great breakout!

 

[Wyatt]

Is PNC worthy? 4% divvy or is the sector a bit risky right now.

CDV kicked on today, great funnymentals although questions with ore type & recovery rates. Drill results imminent?

This chart looks like a potential breakdown.

Cheers,
Wyatt

 

[Boggo]

MSB, it's got the attention of my weekly system too tech/a

(Weekly chart - click to expand)

 

[tech/a]

Nice Wyatt

Boggs could be the beginning!

 

[Arq199]

Been watching MSB last few days. Was being pretty conservative and haven't bought in pending today's movements.

It's filled the gap perfectly on open today. Stops it from being a huge breakout contender, but certainly doesn't cross it off my list - filling the gap to me means it isn't going crazy, but it could continue a nice surge upwards. The question now becomes whether it finds support having filled the gap, or whether it tanks back down to nothing territory.

I'll be watching through the day.

 

[Arq199]

Nup. Never mind. It's stabilised a bit, but I'd really rather see the support building on the buy side to be confident it won't just collapse next week. Without the volume or the support, it's too risky for me.

 

[Boggo]

Seems to be on the way nicely today, up over 8%

 

[tech/a]

Been watching MSB last few days. Was being pretty conservative and haven't bought in pending today's movements.

It's filled the gap perfectly on open today. Stops it from being a huge breakout contender, but certainly doesn't cross it off my list - filling the gap to me means it isn't going crazy, but it could continue a nice surge upwards. The question now becomes whether it finds support having filled the gap, or whether it tanks back down to nothing territory.

I'll be watching through the day.

Weekly cuts out some noise

 

[Kryzz]

BKL showing some signs of life, weekly chart shown here.

 

[Kryzz]

FXJ another weekly chart here that has been ranging for some time

 

[PeterJ]

HZR is shaping up well
a close above .80 c !

 

[Kryzz]

Was stopped out of CGC last month, watching closely for another breakout hopefully.

 

[Wyatt]

Has this stock been effected by the QLD/NSW floods at all? From memory they do a lot of mushrooms in SA, not sure about the rest. Nice chart with medium term momentum, have to keep an eye on it.