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Strategies & Market Trends : Underexposed Technical Analysis

AQN 6.490

-0.6%

Feb 6 9:30 AM EST

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To: Johnny Canuck who wrote (889)	3/21/2021 8:52:17 PM
From: Underexposed	2 Recommendations Recommended By Cogito Ergo Sum George Statham Read Replies (3) of 914

Hi JC I decided to discuss my "trigger" chart more and illustrate some of its nuances. Each chart I create has different clues incorporated. They are not blatantly obvious but will become apparent the more you use this chart of mine. I will illustrate some of these clues in the following charts Discovery Inc [DISCK:NASD] This stock is a great performer!!! Discovery is the one of the largest global media providers with over 2 billion cumulative subscribers in over 220 countries. Its three traditional networks (Discovery, TLC, and Animal Planet) each reach over 85 million U.S. households and more than 200 million international subscribers. The top two networks (HGTV and Food Network) acquired in the Scripps transaction are available in more than 87 million households in the U.S. The international segment consists of national and pan-regional networks over 294 unique distribution feeds in more than 45 languages. I looked at its financials and frankly I was not overly impressed. It made more revenue in previous years but it took off after that 3rd quarter reporting back on Nov 5 and is still climbing like a rocket since. Let's look at the chart starting from the left Would you have seen that buy signal shown by the solid green line? The Slow Sto soared to 80, the MACD was climbing and then the BBWidth started to climb.... Now you could say previous to that the BBWidth also had some positive events...why are these not buy signals??? Well the Slow Sto and MACD were not in a positive slope back then so those BBWidth signals can confidently be ignored Next is the circle in the main chart.... look at the 20daySMA (dotted green line) .... it crossed both the 50 day and 200 day SMA's... Later the 50daySMA crossed the 200day SMA. These are not buy signals as such but rather they serve as confirmation that a positive move identified before is not a head fake . Look at the performance of the Slow Sto since November.... it is solidly above 80 with the exception of a couple of minor dips that quickly recovered. I am not in favour of so-called OVER-BOUGHT/OVER-SOLD designations to oscillators. The common chestnut is that on reaching one is supposed to sell in anticipation of a coming fall and take your profits....well look at the profits you would give up if you decided to sell in December !!! .... NO....the decision to sell depends on the action of the Slow sto and the MACD and BBWidth. A sell signal is given by a decline of the Slow Sto below 80 followed by the decline of the MACD and sudden rise of the BBWidth. There is no such sell signal for the last 4 months..... In fact there are 2 minor buy signals (dashed green lines) that are confirmations of good fortune for the stock price and could be used to add more stock if you wanted to. The way the share price hugs the upper bollinger band is very bullish. If it jumped high above that upper band that would be a time to consider selling as that is a rarefied atmosphere and a severe pullback would be expected. The purple line at the bottom of the BBWidth shows us when major changes will take place. As can be seen earlier the decline of the BBWidth did not affect the share price earlier. Nothing would happen as long as the MACD and Slow Sto don't reverse....Actually nothing will happen if they do reverse as long as the BBWidth does not suddenly go positive (more discussion in another chart The prognosis for this stock is a continued rise in price.... as long as the Slow Sto stays above 80 all is well. How long will it continue rising? This chart cannot tell, though it will take at least a month for the BBWidth to fall to that purple line. Other charts such as a P&F chart may give clues of a resistance point...that is why I use several charts in a complete assessment. The is enough for now....I will show another stock another day. UE

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