Volume-Price-Patterns-Context & Catalysts - Example Charts & Analysis

[Lone Wolf]

I just had a chance to have a good look.

You are correct L/W
I've altered the chart to reflect the correct marking.
It still doesn't alter the analysis.
But lows were tested and supply absorbed back to the
volume control area.

Thanks Tech, good to know I'm not completely losing the plot.
On that chart (AX1),the second highest volume bar on the chart happened to cover almost exactly the same area. Does this repetition of volume being traded in the same area add anything to the picture?

 

[tech/a]

Yes your ahead of me a bit.
At 5he time of that bar printing it would have been the
VCB in control until the next bar highlighted printed.
I see this as a strong zone.
The spike down happened on lowish volume ——
Watching closely as the next few days will likely show this
Is distribution.

 

[greggles]

@tech/a - I'm interested in what long periods of consolidation can tell us. I know you're familiar with Silver Lake Resources and I noticed that have spent longer than a month consolidating between 55c and 60c. Is consolidation just buyers meeting sellers equally and keeping the price within a narrow band? The volume here has been quite good, so are there are signals that tell us when buyers are overcoming sellers and vice versa? Also, does consolidation create support and resistance? (i.e. is the current price action creating resistance at 60c)

 

[tinhat]

This discussion is very informative. Thanks.

 

[tech/a]

Also, does consolidation create support and resistance? (i.e. is the current price action creating resistance at 60c)

Consolidation has a life of its own.
(1) Width
(2) Breadth
(3) Closes
(4) Volume characteristics

All very important and all very necessary in our effort to read what charts are saying to us.
Certainly part of the topic I would like to cover and discuss. In answer--A broader more consolidated, Consolidation tends to act as support or resistance. Where smaller consolidation/patterns can have little or no effect.


Time is flying (Away for 2 mths in August/Sept) and there is so much happening on the charts I've suggested we look at,that I'm not getting to update and continue the main thread.
Ill comment on most of the charts tonight then continue with the original discussion.
Lots to cover.

 

[tech/a]

 

[tech/a]

We are currently charting AX1,MYX,SLR,SHV,BID,HSN,ISY

These charts are presented with commentary to show what I see and how I would progress with the IF I had them on a watch list and decided to keep them for an opportunity.
I'm for ever culling my own and do not comment on the charts only placing arrows and Zones of interest.

Here are 6 of those charts.
I will only comment in the future if something happens in the chart.
If you see something before I do---please post away!

 

[tech/a]

EXERCISE

Looking at the group of bars highlighted in RED

 

[Cam019]

Monday's bar broke through and closed inside the resistance zone on high volume. We then have three consecutive gap ups with Thursdays bar closing outside the resistance zone, signalling strength. Volume was 1/3 - 1/2 of Mondays volume during each of the three gap up days, indicating supply withdrawing. Friday saw a down bar closing off the days low inside the resistance zone, with price closing the top two gaps. Volume drying up. A good sign. Ideally, we'd like to see the first gap held with a narrow range, low volume down bar. A nice little continuation pattern with a low risk entry. Additionally, no over head resistance with a break over 4.23, but could see some profit taking from short term traders.

 

[myrtie100]

Here's my take

 

[lindsayf]

EXERCISE

Looking at the group of bars highlighted in RED


View attachment 88203

The push up above the vcb looks like it is just price looking for the liquidity from the stops above the highs to the left. I would not be surprised now to see price fall right through the vcb zone.

 

[greggles]

EXERCISE

Looking at the group of bars highlighted in RED

Friday's price action was profit taking on low volume after the bullish move out of the consolidation zone earlier in the week. After four days of higher highs and higher lows, profit takers have moved in and supply has overcome demand. On Monday I think we'll see another low volume day ranging between $4.08 and $4.20.

 

[tech/a]

EXERCISE

Ive posted my thoughts using a Weekly chart to show
a different and hopefully clearer look.
AD8

The daily chart clearly shows a very weak break out from the consolidation.
Without stronger volume on a daily break this is likely to just revert to the
consolidation area.

The good news is that Friday was an extremely low volume day with a little range
someone was happy to chase a lower price.
A quick break on volume will see higher prices.
Reversion back to the pattern will see more distribution or accumulation. (The future will tell which).
If I was holding today could be a decision day. If price hardly moves then I would have to wait!

$4.05 out
$4.24 + hold
In between wait. It will become clear.

 

[greggles]

On Monday I think we'll see another low volume day ranging between $4.08 and $4.20.

Well, I was mostly right. I set the lower end of the daily range a little low because I thought that there would still be an excess of supply at or near the open and the bounce would come later in the day. It ended up being a tighter range than I thought.

 

[just_jay]

tech,

Do you have any advice on maintaining a watchlist? It takes me 10 times as long to scan a chart now using VSA and my daily scans of 300 odd charts are going to be near impossible to maintain.

Do you use a screener, or do you do a manual scan of indices you trade?

 

[tech/a]

Firstly what are you scanning for
What is your criteria??

REMEMBER
VSA individual bars are only indications of future price action.For me unless the chart is showing me a strong reason why it’s likely to trade in my direction
COMBINED with a chart which tells a positive story supporting my chart in the watchlist—-such as pattern and or Context and or Catalyst and or very clear signs of supply withdrawing or coming in —- a chart with only one criteria met will very rarely make a watchlist.

Then once you have a prospect and in a watch list
I download data each night open the folder with my watch list and flick through the charts
Those that have destroyed a pattern or broken down from the principals I know to be valid in a setup for a trade I discard.
I’m pretty brutal and most will show within a week,discarded/watching or trading.

I flick through the scans after this.
Here I’m looking for the characteristics I need to see to place either a trade or in the watchlist
While they maybe ok from the scan they won’t make the visual scan.

I generally have up to 50 in my list.
There are many days when I don’t up date the list
Just too busy.
So I miss a lot.
I do however keep right on those being traded.
Even then I’ve been caught—both in a bad and costly way and a nice surprising winning way when in meetings or on sites.

Lots to add to this thread bear with me I’ll do as much as I can with time available.
One good suggestion is a glossary of terms.
Will get there!

 

[statmech71]

Thanks for the detailed explanations Tech - fantastic thread

 

[bngood]

I am wondering if NAN has shown enough range to consider this to be a control bar.
Long consolidation. Has formed a wedge.

 

[tech/a]

Please see chart mark up.

 

[bngood]

Please see chart mark up.

Thanks, tech/a that is great!
I didn't know about including the gap. It is an interesting method.
3.14/3.15 seems to be a sticking point (resistance/support) for NAN.
Let's see if today's action can take it above there.