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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: aerosappy who wrote (5749)	10/9/2005 8:12:23 PM
From: chowder	Read Replies (1) \| Respond to of 13449

Aero, Every time frame will show a different picture. COP, UPL and CHK have various stages of indicators showing as well. UPL looks to be the strongest of the group, CHK the weakest, even if we look at the weekly time frames. One of the strategies I have proposed from the beginning is one of partial positions. If someone wants to hold on for the long run, then holding a partial position helps to manage reward vs risk and trading the other part increases the odds of maximizing results. The 3 stocks you mention are all in a different phase in the short term. UPL is in a snap back up pattern. It was showing a 3 bar drop into a rising 20 day moving average. If it trades above Thursday's high by about 6 cents, it should trigger an entry. Since MACD is showing negative, I would expect a partial retracement at this point, not a new high. (That's on this leg.) stockcharts.com[h,a]daclyiay[d20050609,20051009][pb50!b20!f][vc60][iut!Lah12,26,9!Lc20]&pref=G Therefore, if one were holding a full position in UPL, one might want to consider selling 1/2 position if price can trade up to $58.00 or $58.50. I would expect price to retreat prior to $60.00. If you are wrong, you can pick the other 1/2 back up on a break out above $60.00. Where you manage the risk is that there was a lot of technical damage done in this sector. Institutions were selling off and they may not provide the energy to help these stocks break out to new highs. They may sell the rallies. All we're looking for is a balance between reward and risk with the edge towards reward. COP is showing a double bottom bounce with a Morningstar candlestick pattern. We should see price come up and test the 50 day moving average. Again, one can keep 1/2 of a position and sell the other 1/2 into resistance. With the amount of technical damage that has been done, it would be reasonable to expect the 50 day test to fail. If not, you are still in the trade and you can buy the other 1/2 position back above resistance which will then serve as support. stockcharts.com[h,a]daclyiay[d20050609,20051009][pb50!b20!f][vc60][iut!Lah12,26,9!Lc20]&pref=G CHK is the weakest of the 3 stocks you mentioned, in all time frames. Price is in the zone between the 50 and 20 day moving averages with a good size gap to fill. Fill the gap and break out and it's a buy. Break out on large volume and it's a good enough buy to overweight your position and make up for the lost ground by waiting. (People don't mind overweighting when they average down, this would be a good example of overweighting on the way up, provided you follow the stop loss rules.) stockcharts.com[h,a]daclyiay[d20050609,20051009][pb50!b20!f][vc60][iut!Lah12,26,9!Lc20]&pref=G Now let me show you something from an intermediate term chart. The weekly chart is supposed to provide a longer term view of what's going on. I have an indicator called Balance Of Power, BOP for short. BOP tells you whether the "UNDERLYING" action in the trading stock is "characterized" by systematic buying (accumulation) or systematic selling (distribution). Only 3 colors show up on a BOP chart. Green, yellow and red. If green shows up you have systematic buying, the institutions are accumulating. Yellow is neutral and red represents systematic selling. Here's the rest of the explanation of BOP. Message 20785345 The week before last, institutions were selling CHK as it was setting recent highs. It was followed up by more systematic selling this past week. The middle window shows a zero line and below the zero line is bearish. Note how far below the zero line the weekly BOP readings are. A clear sign of distribution. Also note the bottom window where money stream (MS) has fallen below the 15 week moving average and is now at the bottom of the chart. CHK: ttrader.com UPL was also selling off the week before last as price was setting a new high. However, the BOP readings and money flows aren't as severe as they are with CHK. UPL: ttrader.com COP is not showing systematic selling. Its readings are neutral on the longer term time frame and looks like it sold off with the sector. It does look like it's forming a broadening top though and would need professional buying to push price out to new highs. COP: ttrader.com In an effort to increase the odds of success, the above charts show the strength and weaknesses of each stock. Rather than one size fits all, each of the three have a different strategy that should be used in order to maximize the reward to risk ratio. I've tried to show the short and longer term time frames so those who are interested will know what to look for, which in return may help them maximize profits. dabum