All Entries in the "chart patterns" Category
Don’t Ignore Event Risk
October 17, 2012 at 5:50 pm
In this video, we’ll look at a cup and handle pattern which is starting to play out but which may be interrupted due to a key event.
Run time is 3:25.
(Direct video link is here for those interested in embedding it elsewhere to share).
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
The Northern Road to Recovery
September 13, 2012 at 4:36 pm
One stock on my radar right now is Northern Oil and Gas – NOG.
Having emerged from a 48.5% correction from the January high to the July low, the stock has seemingly turned the corner technically. A quiet lift into mid-August was met with only limited selling pressure on weak volume. That carved out a higher low, then strength returned on heavier volume with the arrival of September to mark a higher high.
Currently the stock is sitting in a tight bull flag pattern, which if resolved to the upside, could spark a continued recovery in the name. This is one to put on the radar for the days to come, as this rest phase sets the stage for higher prices once again.
Here’s a closer look at the chart of NOG for you:
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
When Resistance Becomes Support
September 11, 2012 at 2:25 pm
Levels on a chart become more valid with every touch. Whether it’s a trend line or a lateral level, each time price respects it, it adds credibility.
One thing I watch for frequently is for lateral support/resistance levels, and specifically when they’ve flip-flopped their roles. By that I mean a level which had been support which has become resistance, or vice-versa. That tells me that both bulls and bears alike can at least agree on that price area being important.
I ran across a chart today which is doing this very thing. WDC respected the $41 area back in mid May, then again in late July. The stock powered through that level in early August, but in recent days it has pulled back to find support there. We’ve also seen elevated volume in recent sessions as that level has been tested, suggesting this is indeed an area of contention.
Since the peak more than three weeks ago, a descending trend line off the high has also emerged. Currently that trend line and the $41 key level are starting to compress price. A resolution one way or another should set the stage for the next move.
Given that the intermediate term trend is up, watch the descending trend line for a possible break, currently around $42.80 (it descends daily). That may deliver some upside pressure back toward the high near $46.
The $41 level would be the natural zone to watch for a failure, but on a reward-to-risk basis that only offers about 2 to 1. That doesn’t qualify for me for a swing trading candidate, but the chart nonetheless is worth pointing out as it gives such a good example of a key level playing a role from both sides of price.
Here’s a closer look at the chart of WDC for you:
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
Breakout Watch: DKS
September 10, 2012 at 2:43 pm
A big element of trading the technicals effectively is having the ability to identify patterns which are under construction. Taking note of stocks which are in the development stage of their patterns helps not only in recognizing key levels to keep an eye on, but also in monitoring the price action before the stock comes to a decision point.
One stock on my radar right now is Dick’s Sporting Goods – DKS, which has been in a longer-term uptrend for a little more than a year. In recent months, however, the stock has put in some healthy rest which has formed a large ascending triangle pattern.
The chart shows well-defined overhead resistance, as well as a pair of uptrend lines from June and July. A push higher out of this pattern sets this stock free to begin building another leg higher.
Here’s a closer look at the chart of DKS for you:
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
Picking Up Points in Penney
September 7, 2012 at 9:15 am
Thursday allowed me to close out an excellent 11-day trade in JCP which paid 12.9%.
As simple as that sounds, there were several steps involved, including patience, so I wanted to walk you through the process of this trade from beginning to end in hopes of helping you with your next position.
Perking Up
With JCP having endured a significant downtrend from February to July, the stock sat more than 55% off its highs. That alone is never reason to enter a buy, but it can indicate the shorts are overconfident and the stock has become beaten-down enough to produce a bounce.
So, after seeing a short-term higher low established in early August, it was placed on my watch list. Not for a trade, but simply to monitor in case this developed into a change of character.
Here’s how JCP first looked when I noticed it and put it on watch:
Pressuring Resistance
Having then rallied past resistance, JCP then entered into a narrowing base just beneath a short-term level. Dips were getting bought a bit more aggressively, creating some higher lows over the previous few sessions.
I set up a buy for $24.80, which triggered on Aug. 23. Here’s a look at the chart I shared with subscribers when I listed the trade:
Producing Gains
The initial trigger wasn’t met with great enthusiasm, but neither did the stock fail its breakout attempt in grand fashion. It was quiet, so I stayed with it without panicking. Just a few sessions later, Target 1 had been reached for a pretty quick 8%.
The stock pushed just 8c past that level before seeing some mild profit-taking, which ultimately allowed me to tighten my stop for remaining shares. Here’s a closer look at the chart as of Target 1:
Pausing Before Payoff
The profit-taking was mild and took place on quiet volume, which meant virtually zero pain but also required a little patience. This stage of trades always brings on the questions… “is it done?”… “should I just book this and move on before it pulls back deeper?”.
But I stayed with my tightened stop and waited for the stock to either roll back over and stop me out or push higher and prove itself. That resulted in the final push, worth 12.9%.
Here’s a look at the rest phase before the pop to Target 2:
This was an excellent swing trade which paid off quite nicely. It took some good initial analysis to detect the play, it took proper management of the position once it was on, and it took a little patience to stick with it through the mid-trade lull before the final pay day.
These are the kinds of trades we make a big portion of our money on. Every one of them is shared with subscribers of our stock pick service, along with the entire trade plan from the outset and ongoing evaluation once the position has been put on.
Try us out for yourself and see if we don’t deliver the value I’m referring to. It’s no wonder so many of our members find the monthly price so easy to pay when plays like this are provided.
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
YNDX Eyeing Continued Recovery
September 5, 2012 at 9:17 am
YNDX sold off hard and steady from its spring highs, shedding 40% from its peak to the June low. Not coincidentally, that low coincided with the December low from 2011, getting within 5 cents of prior support before stabilizing.
Since June, the stock has gradually worked its way higher, stabilized, and now looks ripe for some continuation. It’s sitting in an ascending triangle pattern, which could spark more buying if resistance gets cleared.
Note how volume is perking up in the last couple of sessions as price turns higher within the triangle. That may be an indication it’s gearing up for a move, so this one belongs on the radar.
Here’s a closer look at the chart of YNDX for you:
Trade Like a Bandit!
Jeff White
Subscribe to our Stock Pick Service to get our trades.
Burrito Time!
January 3, 2012 at 10:19 am
Don’t look now, but CMG is back on the move – and potentially in a very big way. The chart below outlines the large, multi-month ascending triangle that’s been forming, and currently we’re seeing a breakout attempt in the stock.
But can it stick?
That’s always the million-dollar question, but with a solid uptrend in place and prices now pushing to new highs, I certainly wouldn’t bet against it. In fact, I like it for a push to the $425 area, which is the projection of this pattern (add widest portion of triangle to breakout zone).
Here’s a closer look at the chart:
 An aggressive stop would be a gap fill to the 12/30 close of $337. Nice setup.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
Follow TheStockBandit on Twitter or get our free newsletter to keep up!
