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

To: epicure who wrote (7110)	1/12/2006 9:30:10 AM
From: chowder	Read Replies (1) \| Respond to of 13449

I don't have time to provide the type of response I would like to give. The market is getting ready to open. I will share several ideas with you later today or tomorrow. I want to try and provide a response that has value. dabum

To: epicure who wrote (7110)	1/14/2006 9:36:14 AM
From: chowder	Read Replies (4) \| Respond to of 13449

Re: ELN ... >>> Regarding ELN- do you have a sell target? <<< Yes I do. However, before I share that price target, I should share the philosophy behind the strategy. This should help to provide some insight in how to use supply and demand to help you with your trades, as they are all that really matters. When you look at the accompanying chart, you will note a purple rectangle in the $20 to $25 price range back from October 2004 to February 2005. This trading range represents overhead supply. This overhead supply represents people who are losing money on their position. Every single person who bought back then, and held on, is praying that the price will come back up and make them whole. They will be relieved to sell their position and breathe a sigh of relief that they got out even, or with a very small loss. This supply range is what should stall any advance that ELN will try to make, once it gets to that price level. The second thing to notice is the light blue rectangle in the price range from $10 to $20. When ELN received some bad news about a drug, price gapped down at the open and not a single trade was made in the $10 to $20 price range. Since there wasn't a single trade in this range, this range is called "void of supply." Since there isn't any supply to come to market in this price range, it is much simpler for price to continue higher as the only thing driving price is demand. Price can continue to rise, even on small demand, if there isn't any overhead supply coming to market. Once we have an understanding of this concept, we can then understand why professional traders prefer to buy stocks breaking out to new highs. They don't focus on whether price is too high. They focus on the relationship between supply and demand. When demand has a decidedly edge, price is going to experience a Stage 2 uptrend. ttrader.com I am looking for ELN to reach $20 in the coming weeks, barring any market moving news. If we don't get a pull back, I plan on selling half of my position there and use a trailing stop on the remaining position. I may change my mind later, but at this time, I will use a trailing stop known as tracking the lows. As soon as price trades below the low of the previous week, I will sell the other 1/2 position. I'll have to review at that time because things could change. If price doesn't achieve my price target, I will use a two week stop for now. By that I mean, I will place a stop below the low of two weeks ago and raise that stop each week to track the two week low. dabum