Hi friends,First the necessary preliminaries:This discussion is...

Hi friends,

First the necessary preliminaries:

This discussion is strictly for short term traders only. This post contains ZERO fundamental content. If you are a fundamental investor or long term position trader and do not wish to waste time on charting, technical analysis or technical computations, please do skip this post so that I do not waste your precious time. Thank you.

Now on to the discussion:

Consider this situation:

You have heard a lot about this penny stock where the price has been brought down low over the months. You wonder whether there is a short term trading opportunity. So what you do is to perform some technical analysis and charting to check things up.

Apart from the normal classical technical indicators such as MACD, stochastics, RSI , moving averages etc you can also use cycle analysis to determine whether there are trading opportunities, particulary the possible entry position.

To do this, I normally find out the dominant cycles, and plot their cycle sum or alternatively plot the slope of the main cycle in degrees. Where this indicator cuts the zero horizontal line in degrees upwards, that represents a possible entry position.

Here is the chart showing the slope of the cycle plotted in degrees. Out of the various possible entry locations, only one entry did not result in a positive gain, neither did it result in a loss rather than just brokerage. The rest resulted in profits.

You can see we have had just sighted a possible entry location, and have started to move up from its lows.



Hope this chart is useful, and please read the disclaimer below my signature line.

May the best prices be yours

dascore