Make it a point, green arrows mean bullish convergence, red arrows mean bearish divergence.
For similar stock patterns(like the way the candlesticks are arranged) in the past, look at other factors(RSI, Stochastics, MACD) for further confirmation.
Creating your own index
Bank index , other index.
You can create your own.
Step1
You create watchlish , you can called it as bank sector.
Then you input OCBC, UOB, DBS and SGX into this watchlist.
Step2
After that, you right this watchlist, plot index .
Then you will have bank sector user index.
From here, you will the trend of bank sector.
Step3
So you can create many other sector like oil and gas and commodities or so so.
Step4
So if you find out index go cross 20ma , it means bullish
you can use TA tool to analysis the user index.
Volume is more important for the double bottom than the double top. There should clear evidence that volume and buying pressure are accelerating during the advance off of the second trough. An accelerated ascent, perhaps marked with a gap or two, also indicates a potential change in sentiment
Head and shoulders is of declining volume.
Symmetrical, Descending and ascending triangles should have diminishing volume.
Depending on the period of accumulation and distribution, we have to see the changing hands – highlight with bubble and classical resistance/support – if unclear.
Bear and bullish flags have diminishing volumes as well – take note that the rally is meant by a sharp move [decline/increase] in price suddenly with high volume.
Dead Cross is when a faster moving average cuts below a longer-term moving average. Short-term MA vs short-term MA means short-term bearishness and vice versa. [20SMA Vs 50SMA][50 SMA vs 100 SMA]Golden cross is the exact opposite of dead cross.
Volatility index - VIX can be found on chart nexus under the name: CBOE S&P 500 Volatility.
Sometimes, it is good to ask if “All supports are broken?” or “All resistances are broken?”
Drawing Trendlines
Check the US dollar!
When the dollar goes up, the market comes down. When the dollar goes down, the gold goes down and the market goes up!
Talk about volatility:
For breakouts, we have to look at the period of the congestion first (how many months it take to form the congestion). Secondly, we have to check out the volume, if the volume is lesser during some periods of the formation – most probably the uptrend/downtrend should be a short period.
The 3 main banks are UOB, DBS and OCBC – add SGX into this as well.
When the stock is going a sideways direction, it’s a good idea to use the MAs to confluence as the resistances.
Jaychia- biosensors – regarding a chart with the indicators giving many signal failures, it is a sign that a formation is to be formed. So, certain actions during the formation of the pattern can include whipsaws.
If the market is not bullish enough, so don't expect all stocks to rally. Just focus on individual stock. Look at individual other indicators to see more bullishness. Lessons learnt before – golden cross or crossovers.
Force Index EMA (13D) – Green is bearishness – can help to see divergences as well.
Sometimes, during reversals, you should see if the candlesticks and bullish/bearish crossovers.
Market Dynamics
market consists of
1.Informed players
2. Uninformed players
3. Liquidity players (invest only for personal objectives, not significant in turning the tides of the market)
Market sentiments + Fundamentals =
Case study – 1995 – since 1990, the bullishness continued. Informed players relied on uninformed players.
Questions – Is it true that uninformed people have the most money?
Efficient Market Hypothesis (EMH)
consist of behavioral finance and investor psychology.
Can we use the OBV (on balance volume) to describe investor psychology?
The odd lot theory applicable – Poor people buy when the market peaks, throw in odd lots as an additional gamble. The informed traders buy when there is odd lot selling (doing things the exact opposite) Just a theory?
Whipsaw market describes the market heading in a sideways direction.
Trend changes when the subsequent high doesn’t hold. Current resistance at previous peak is broken.
Lagging indicators reveal the signals when the price move has already happened. The drawback of such indicators state that the trader might be too late to enter a position.
Coincident indicator – indicates the current condition of the counter.
Leading indicator – CCI (commodity channel index) – possible to predict changes in the counter through overbought/oversold levels. The leading indicator states the changes before it is reflected in the price action.
Buy when there is low volume during the pullback. This is a good scenario as the institutional players are coming back.
Prices often move in the direction of the gaps. Warning is that after 3 or more gaps, the stocks can become overbought and oversold.
Big boys buy at levels of weaknesses. Catch tails/shadows at support levels. (Candlestick wicks that touch the support)
Ideal Portfolio Monitoring
Initial Capital B/F
Buy Price
Interim Capital Remainder
Transaction Costs incurred
Sell price
Profit gained
Loss Incurred
Final capital remainder
General Stock Watch
Failed island reversal signals are common. Therefore, it is a good idea to wait 3 to 5 days after the initial formation before confirming it as a valid signal.
Declining wedge is bullish, rising wedge is bearish. Check to see if it is possible to combine trend trading with this.
Flags or pennants that are formed above the trading range(consolidation period) are bullish. The vice versa applies.
Stochastics Pop - by Jake Bernstein
1. Plan to take profits or stop loss when the stock moved to a price that is twice the price it had at 75%
2. Take profits when %K falls below 60%
3. Take profits when %K falls below %D
4. Expect to see a congestion top and take profits when you see bearish divergence
Exaggerated hinge and hinges are used as impending warnings for stochastics.
Stochastics has no way of defining how much further can the price go once it becomes overbought or oversold.
MACD Histogram bars states buying or selling pressure.
Ten record highs- exit all long positions
Four/Three day High/Low reversal - (Hang seng example by Jonathon) - act when either support and resistance are breached.
Reversal gaps with diminishing volume suggest strong market sentiment
Very often, Springs and upthrusts(jabs) will occur prior to a big move in the opposite direction. - considered price reversals.
The more time spent in a line congestion area/Larger congestion area - the more dramatic the run will be.
Pattern Probability System
1.1 Uptrends
Symmetrical triangle
Rectangle
Ascending triangle
Falling wedge
Rising wedge
2.1 Downtrends
Symmetrical triangle
Rectangle
Minor tops (Double top & Descending triangle)
The longer the trendline and the more times the price touch it, it becomes more reliable as it offers more support when market prices test it.
MAs that are pointing down acts as a strong resistance when they are really close. MAs that are pointing up act as support instead.
Look at possible signs of correction for cheaper and entry for all indices
Do support and resistance with simple moving averages.20,50,100,200.
Look at possible bearish and bullish divergence? For RSI, MACD & Stochastics
Do indices and stocks go together? -jonathon quote Bearish reversal from xperttrader.
Sector rotation to maximise profits. Possible to use counters of specific sectors to maximise profits.
Reits
Finance & banking
Commodities
Property
If stocks don't break support for 2-3 months. Should be more likely to go up.
After looking at the 3 main banks,natural reaction to look at sgx.
If all stocks of a particular sector are at support, the only way they are going to go is up.
Us dollar interest rates very low.hedge fund managers like to borrow usd and invest into Asian market. Might affect Asian market when they pull out.
St engineering
SATs
Look out for Trailing stop and ride on profits.
Suntec reits
When Fibonacci fits together with the moving averages (classical support levels), retracement is correctly perceived.
If the indices have two support levels,it is more support. So look for stocks that are tt1 long,4 red 1 green.(bullish reversal with RSI), (bullish reversal with candlestick), ma at support.
Worldindex all stocks bearish reversal- all arrows point to the top.gauge and don't long positions.
Volume increase by 30%- last trading day-on Friday, will use the last one week, shows you things you might have missed out. Then do technical analysis on selected stocks only.
Expanding wedge two different trends
Overlaid - (same space as the chart) vs independent indicators appears in a separate window
PSAR indicator - once the bottom dot is hit by the stock price, the PSAR will reflect as bearish
If macd is quiet for sometime and there is a sudden crossover, it is a strong signal
The macd histogram can be viewed as a line macd reading
