I don't know where price will go on SUNW. I do know why I was willing to buy this break out.
In looking at a weekly chart, in addition to price, I focus on volume and money flows.
We can see on a price chart that SUNW has broken the down trend and looks to be establishing an up trend.
The middle window has an indicator called TSV. This is a volume indicator. You want the volume indicator, the white line, to be above the 20 week moving average, the blue line, and be above the zero line. The indicator in the accompanying chart will confirm that SUNW is being accumulated.
The lower window has an indicator called MS for money stream. It too is above a 20 week moving average and is up near the top of the chart.
Volume is rising, money flows are rising and price is rising. As technicians, we look at this information and decide if we think that trend will continue. It's as simple as that.
ttrader.com
Since I have now determined that I think price will take the course of least resistance and head higher, I need to know what it will take to change my mind. If price falls below this past week's low, I will change my mind and get out of the trade. That will tell me that based on the very small profit I have at this point, my timing was off on the entry.
If my profits were larger, I would adjust the parameters that would determine where I exit the trade.
For those of you who are new to this thread, that's how I use technical analysis.
dabum |
