Thought I would have a go at trying to give an example of how you can use some of the knowledge Jako has so graciously shared. Might try to find a chart every week if it is helpful. I don't consider myself to be a master of VSA but I do find it useful. I have somewhat bastardised some of the VSA concepts/language and made it my own (but I feel I still capture the essence) so please ask any questions if anything is unclear. And @Jako8557 please correct me if you think I'm misleading people.
The chart is ALQ
Weekly
Analysing the weekly chart allows you to understand the market structure and background around the area you are interested in. In the following images I have tried to break down the key points which seem to reveal the nature of the demand/supply balance.
So the key take away from this analyses is something like:
- The stock has background support
- Recently seen strong support at 7 and 9 which seemed to be moves that might have shaken off uncommitted/weak holders.
Once we have framed the structure and background of the area we are focussing on, we can move to the daily analyse the local situation.
Key take aways from this:
- There is strong background support, and the stock continues to find support where you would expect.
- This sequence of events has seemingly exhausted the supply in this price region.
So to me the path of least resistance seems to be to the upside.
Now a disclaimer.
Analysing price action and trading it are very different things. This isn't trading advice.
Anyway, hope that is of some interest.
