@Zenzen – thanks for the feedback. What I call an “Anchor Zone” is based on TA provided by Tradeguider Systems VSA (Volume Spread Analysis) and L.A.Little’s book “Trend Trading Set-Ups”. What I look for, and the indicator rules that I’ve programmed using Amibroker afl, is for a daily price bar/candle with Volume greater than 3 standard deviations above the average (15 period) Volume, i.e. excessive or very high relative volume. The Close of the Candle is the anchor level. It’s the thick horizontal green dotted line on the chart. I also plot a dotted green horizontal line from the High of the candle and a red dotted line from the Low. I’ve highlighted these levels on the SYA chart below.
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I’ve found that the bigger the Volume the more significant is the Anchor Level. I plot the High and Low of the Anchor Zone as generally I’m not sure where the real Anchor Level lies, i.e. at what level was the majority of volume traded on that day. So I watch the following price action to confirm the support/resistance level and also to indicate whether the price action was buying or selling by the “Smart Money”. As far as spotting resistance and support levels the historical Anchor Zone levels along with the 50MA and the 200MA are the ones I concentrate on.
@vermkart – I like the Ichimoku charts as well, basically because of the visual aspects of the chart. As you point out in your post it looks like the SP could go sideways for a while now. One thing I didn’t take account of until it was pointed out to me is the Forward Cloud. As you can see on the SYA chart the Forward Cloud has now turned green which is a sign that a trend change to up is getting closer. Is this trying to read too much into Ichimoku? I’m not sure but I guess we can take it as another sign that a sustained trend change is in the wind. And I totally agree with you re info flow. I think you could directly correlate this with any spec stock SP.
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@sunny1984 – It’s not unusual to see some low volume price action after a significant breakout and impulse move. In VSA the theory is that “Smart Money” have taken a position, i.e. during the relatively very high Volume buying from 02/07 to 05/07. Prior to buying more and driving the SP higher they do some testing of supply by driving the SP down on Low Volume. As long as the Volume remains relatively Low on these lower SP test bars all is OK, as far as the theory goes that is!
I still haven’t taken a position yet. I have to wait until my cycle indicator (stochastic oscillator) comes down to the OS level and then turns back up again. I think I have a bit time left before any new news. I think the quarterly isn’t due until 30/07.
Good luck everyone – and remember DYOR!
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