nktanaka
5 posts
msg #29999
- Ignore nktanaka |
11/22/2003 3:01:14 AM
EWZuber, you posted a message in another thread explaining the Convergent Stochastic Theory by using the stock, wjci. I'm a newcomer to SF so I'm open to any and all input that you can provide. That post gave me a lot of insight.
Could you take a look at ntii. The monthly stochastic is in accumulation at 45, not overbought. The weekly stochastic is at 4.68, extremely oversold, and converging. The daily stochastic for thursday 11/20/03 is 10.5, oversold, and also converging. The hourly stochastic was 8.4. On top of this, the daily rsi(2) was 0.25 and touching the lower BB. My interpretation of this was that it was going to bounce. However, it proceeded to continue to go down by 7.6%.
Could you give any insight on this? Is there anything I overlooked? Any other technical indicators that would be of use? Tips on entry? Some might say wait for green for 10 minutes, which it did today. Any advice or thoughts (on this stock or on the Convergent Stochastic Theory) would be appreciated?
Thanks in advance.
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mika
131 posts
msg #30000
- Ignore mika |
11/22/2003 7:06:56 PM
I would look for 2 higher lows and 2 higher highs, as a signal for a trend reversal. I'd also look for a low on green candle that's higher than the high of the last red candle.
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EWZuber
1,373 posts
msg #30002
- Ignore EWZuber |
11/23/2003 3:54:32 AM
nktanaka
There is one more very critical ingredient to the mix. Trendlines.
For an entry watch for a break of trendline resistance.
I have found this to be a very reliable indicator for entries and exits.
The trendline you choose is determined by your trading time frame.
If you are adept at daytrading then use the 5 minute chart.
For example, draw a line from the high formed at 11:45 @ $4.65 on Friday to the high at 12:45 @ $4.20.
This short term resistance trendline is broken at 1:15 @ $4.16, however there is no stochastic fast line cross above the slow line anywhere close.
Nerxt draw a horizontal line to the right and we see that this line is not broken until 2:15. Also notice at this point we just had a stochastic fast line cross above the slow line ( stochastic(5,3)timing ). That is the entry.
Its this convergence of events that I look for for an entry. It takes the guess work out of it and gets one in early and at just about the best possible point, IMO.
Any violation of the new supporting trendline that will be formed from this move higher formed on this 5 minute chart will be the exit signal.
In this case that is a line drawn from the low formed at 2:15 @ $4.13 to the low at 2:45 @ $4.20. Here a horizontal line is drawn to the right and our exit signal is just below this line at $4.20.
Stochastics are important here too, because if this line is violated but stochastics have become oversold ( on the 5 min. chart )and the cycle is about to bottom out I will usually hold on a bit because usually the stock is about to bottom out and move higher.]
You also need know where hourly and daily chart stochastics are.
If you get pushed out but indicators still look favorable for a longer term move higher you have to be ready to re-enter upon re-occurrance of the entry signal convergence of events to keep from missing the bigger move.
Using this system has kept me out of trouble in intraday moves. It can be difficult to use if you do not have $25K in your account though because of the NASDQQ rule 2520 that limits how many day trades you can make in a 5 day period.
If that is the case one could use hourly charts and apply the same criteria.
For hourly charts a line drawn from the high on 11/20 at 11:30 @ $4.95 across the high on 11/21 at 9:30 @ $4.69 to the right of the chart ends up at about $4.28 Monday morning.
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EWZuber
1,373 posts
msg #30003
- Ignore EWZuber |
11/23/2003 3:59:39 AM
One other thing. In view of the fact that hourly charts stochastics are oversold the stock looks prime for a move higher soon. JMHO
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TheRumpledOne
6,407 posts
msg #30006
- Ignore TheRumpledOne |
11/23/2003 1:59:42 PM
"...However, it proceeded to continue to go down by 7.6%."
ANYTHING CAN HAPPEN. TA is not 100% accurate. The stock market is a guessing game.
That is the reason MONEY MANAGEMENT is the key.
http://www.optionetics.com/articles/article_full.asp?idNo=8558
MAY ALL YOUR FILLS BE COMPLETE.
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wallman
299 posts
msg #30008
- Ignore wallman |
11/23/2003 7:55:38 PM
NKTANAKA,first,looking at NTII on daily chart on PN i do not see it touching the lbb,close but no touch,be that as it may,2 other factors stand out,the 100 day average volume on this stock appears to be 184k,the volume in the last 3 days has been far below this,in fact a pitiful 37k on the 19th,leaving me to believe that the selling could go on in drips and draps for another few days,but even worse is the candle you are trying to trade off of on the 20th,almost a shaved bottom with a top shadow as long as the body itself,it's not surprising that it didn't hold green,if you play down there at lbb these are things you have to watch out for
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nktanaka
5 posts
msg #30012
- Ignore nktanaka |
11/23/2003 11:24:05 PM
Thank you for all of your input. I'm just trying to soak in as much information as I can. What happens on monday to ntii will be interesting. Hopefully it will confirm some of the lessons that I have learned. Everyone, keep up the good work.
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EWZuber
1,373 posts
msg #30031
- Ignore EWZuber |
11/25/2003 2:59:46 PM
nktanaka
I looked at NTII today just to see what it was doing and so far the short term trendline break offered a great short term trade in at $4.16 as I posted on 11/23 and the new supporting trendline was broken at 12:20 @ $4.60 ( conservative ) on 11/24 for a profit of +10.5%.
For the end of day trader the longer term resistance trendline ( on the hourly chart ) has not yet been broken so no entry for that time period yet.
It appears a double bottom pattern may be forming now.
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EWZuber
1,373 posts
msg #30033
- Ignore EWZuber |
11/25/2003 3:31:26 PM
NTII just broke another short term resistance trendline at $4.17. Stochastics on the hourly chart are oversold. Looks like another good trade. JMHO
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