Welcome to the New Weekend Charting Thread.
Feel free to post any analysis on Individual stock charts, Index charts, Currency charts or Commodity charts.
Traditional T/A, Fibonacci, Elliott Wave, Gann, Wyckoff, or even something more specialised.
Day Trading, Short Term, Swing Trading, Momentum Trading, Position Trading, Longer Term.
Do you have a favourite chart you would like to show others.
Or maybe a particular charting principle you have seen, or would like to learn more about.
Is there a some analysis you want on a particular stock, or instrument.
Ask questions, offer answers, anything to do with charts and chart analysis.
Over the weekend this is a place to share.
enjoy your time in the room.........
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Each week I try to look at a particular charting, trading principle or a Quiz to test your knowledge -
Previously I posted about a Wyckoff principle called springs - click here
and their mirror image opposite called upthrusts - click here
Then I posted about a principle called bullish absorption - click here
Following that was about a VSA principle called End of a Rising Market - click here
and then the mirror image opposite called Bag Holding - click here
Then we considered Looking for Trades at the Edges of Trading Ranges - click here
and two weeks back we looked an example of a Potential Accumulation Zone - click here
We have looked at a VSA principle called Upthrusts - click here
Next we considered what a Serious Supply Event - click here might look like.
We have also looked at another Serious Supply Event - click here
Then we looked at trading and Position Size in particular - click here
Following this I posted some diagrams about Traditional Chart Patterns - click here
Since then we looked at Accumulations Zones - click here
and after that was a discussion surrounding various Wyckoff Terminology and the Wyckoff Schematic - click here
Then we looked at Consolidation - click here
10th November 2017 we had a broad look at Volume - click here
17th November 2017 was the VSA principle of Tests and Testing - click here
1st December 2017 was all about the Shakeout - click here
8th December 2017 looked at Reversals - click here
15th December we looked at a specific type of test the Test in a Rising Market - click here
22nd December was a brief discussion about stop placements - click here
29/12/2017 was about the background of the chart and its influence - click here
02/02/2018 was about Double Bottoms - click here
09/02/2018 was about understanding Price and Price Action - click here
16/02/2018 was about the trading action which may occur prior to Price Changing Direction - click here
23/02/2018 was a Quiz to test your knowledge - click here
02/03/2018 was a Quiz to test your knowledge - click here
09/03/2018 was a Quiz to test your knowledge - click here
16/03/2018 was a Quiz to test your knowledge - click here
23/03/2018 was a Quiz to test your knowledge - click here
29/03/2018 was a Quiz to test your knowledge - click here
06/04/2018 was a Quiz to test your knowledge - click here
13/04/2018 was a Quiz to test your knowledge - click here
20/04/2018 was a Quiz to test your knowledge - click here
27/04/2018 was a Quiz to test your knowledge - click here
04/05/2018 was both a Wyckoff principle called Up Thrust after Distribution (UTAD) and a brief Quiz - click here
11/05/2018 was both an example of Bar by Bar analysis, and a brief quiz - click here
18/05/2018 was both a Quiz to test your knowledge, and some Bar by Bar analysis - click here
25/05/2018 was a Quiz to test your knowledge - click here
This week is another Quiz, as they appear to be quite popular.
The first one should be pretty easy, draw the breakdown line, and mark the breakdown bar.
When price truly breaks down from a sideways range with increased spread and a low close, it is very difficult for price to recover in the near term. Many holders will have been trapped above, and if price attempts to recover the lost ground, those trapped holders will sell into the recovery in an attempt to 'get out' and get their money back. It is this selling pressure which forms the increased resistance price feels when attempting to recover from a price break down. Price will often make some sort of attempt to recover, sometimes it is a really decent attempt, and at other times only a half hearted attempt, but generally price will fail to recover the lost ground and move lower, sometimes considerably lower (if the selling starts a domino effect). While a breakdown like this can be devastating to a share price over time, is not always a good indication of medium or longer term prospects, it is usually an indicator of near term, or short term market sentiment.
Price breakdowns are usually more serious when they occur after a longer sideways action or trading range, and often the more decisive the breakdown bar, the stronger the intent of the principle. So for instance - if price has been trading roughly sideways for a long period (months perhaps), and then breaks down with a really wide spread, closing low, and makes only a weak attempt to recover before continuing lower, I would expect the overall impact to be much more serious than when price has only traded sideways for a couple of weeks, and then price only breaks down with an average spread, closing just a touch below the sideways range (and in this second case I would also expect a price recovery would be a higher possibility, and the depth and duration of the pullback may also be reduced).
Finally, breakdowns do not have to be seen after a period of distribution (although they often are), they can occur at any stage of the cycle, but most often after price has been moving sideways in a trading range. When you get good at recognising them, it is also possible to see an early warning using an oblique line (trend line or slanting line), although I find they can be less consistent than the more traditional horizontal line.
I keep putting up examples of price breakdowns because they happen regularly in the stock market, and if you can recognise the principle, it may be of some help - whether to look at opening a short position, finish taking profits, selling part of a long position with the intention of buying back at a cheaper price, or selling a long position entirely.
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This second one is a bit less clear cut, but is also commonly seen in the markets.
Once you have made your decision, you don't have to say 'exactly' what you would do, just a general answer is fine.
What you really need to do is decide if the stock is being seriously bought or not, because if there is strong buying or accumulation being seen, usually those positions will be defended to some degree, and when the time right a price mark up can begin.
If there is not strong buying, or the buying is only weak, then selling pressure can easily overwhelm the demand, and price will probably only go roughly sideways, and price will move down if sustained selling continues.
cheers
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Weekly Charting - 1st June 2018
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