View Full Version : Using TA to time entries and exits
The gift that keeps on giving. Although I'm a slow learner with this at times esp with the selling...
Simple basic KISS strategy as KW's above is effective, why people don't make money is because they think they are smart and know more than MR Market...How many times have we heard on ST the sayings "Insto's caused this downturn once they stop it will rise back up" (suggesting the insto's are stupid) same goes for blaming smaller sellers with insulting names..Strangely enough most of this type of behaviour occurs during an established downtrend.
TA are visual aids and indicators to help one clarify the state of a Stock and simple rules such as KW's above help keep us investors away from potential trouble..and try to prevent optimistic blind investors (denial state) losing more of their money by jumping out of the frying pan into the fire (averaging down in TA broken stocks**)..** Not to be confused with buying/accumulation in dips. Averaging down is a good/lesser risk strategy when TA is not broken e.g Rising primary tide (Cyclic Bull Market Cycle)
I have a printed A4 sheet hanging on my investor workplace room at home.. I refer to it often so to make sure my thinking doesn't run off on a tangent.
My sheet is too tacky to photocopy but a better list is below which has the minor anxioms in order..
CAUTION:..be careful when researching Zurich Anxioms ..over the years people have butchered it with their own bias comments included and these butchered versions have become mainstream..
For many the Zurich Axioms seem to have less relevance today as investment strategies have improved ...hence the temption for them to butcher...What must be remembered is the Zurich Anxioms are an overall generalisation of Rules...and should be considered as a better than nothing alternative than an investor operating without any Strategy and subsequent discipline at all..
The "On Patterns" reference (Axiom) to Chartist illusions is again a broad generalisation which over alll is correct. As a Chartist I has always said the TA (chart patterns included) can not predict the future..In life nothing can predict the future...but as with the FA discipline, TA can be used as a probability (better guess) tool to favour a certain scenario outcome..
Unfortunately people misinterpret the Anxiom generalised meaning and their added personal biases can be seen in the comments...
See the Anxioms thread on ST HERE (http://www.sharetrader.co.nz/showthread.php?8664-The-Zurich-Axioms). the "On Pattern" Axiom shows that piece of butchering..obviously not a TA fan,,eh:)...and the bias commentator (not Lou) added the most reliant of all chart patterns (85% probability) as a 'squiggly line" as the "bad" example..hilarious...What I believe is mean't, is as it says Chart illusion...simple....Illusion in charts are very real as peoples visual perceptions of pictures differ and bias plays a big role..An expert chartist usually has a "trained eye" and they often criticse articles with false illusion which forces readers to only see that illusion.....Picture illusions can be great fun.."can you see Marilyn Munroe or like most of us see only a pretty version of Albert Einstein" ..The illusion works well and if the writer didn't mention Marlyn Munroe, would the readers see Marylin straight away with a cursory glance I would say not...With published charts in biased articles a quick glance from an expert chartist with a "trained eye" would most of the time pick that up......This is why "On Patterns" includes Chart illusions yes they can be dangerous..........
Repeated history patterns are rubbish?....Hmmm I would still take the cautious approach.
Not sure about the take profits to soon as TA discipline says let your profits run...but the generalisation is correct as the anxiom assumes you have a set strategy with accompanying discipline and set targets (e.g Target price trading)..failing to stick to your plan is of course a sign of emotion (greed).
As you read below..some of these sayings are familiar...they get mentioned a lot by TA commentators..eh
The Zurich Axioms:
Black type...Major Anxioms
Blue type...Minor Anxioms
On Risk:
– Worry is not a sickness but a sign of health – if you are not worried, you are not risking enough.
– Always play for meaningful stakes – if an amount is so small that its loss won’t make any significant difference, then it isn’t likely to bring any significant gains either.
– Resist the allure of diversification.
On Greed:
– Always take your profit too soon.
– Decide in advance what gain you want from a venture, and when you get it, get out.
On Hope:
– When the ship starts sinking, don’t pray. Jump.
– Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.
On Forecasts:
– Human behaviour cannot be predicted. Distrust anyone who claims to know the future, however dimly.
On Patterns:
– Chaos is not dangerous until it starts to look orderly.
– Beware the historian’s trap – it is based on the age-old but entirely unwarranted belief that the orderly repetition of history allows for accurate forecasting in certain situations.
– Beware the chartist’s illusion – it is characteristic of human minds to perceive links of cause and effect where none exist.
– Beware the gambler’s fallacy – there’s no such thing as “Today’s my lucky day” or “I’m hot tonight”.
On Mobility:
– Avoid putting down roots. They impede motion.
– Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia.
– Never hesitate to abandon a venture if something more attractive comes into view.
On Intuition:
– A hunch can be trusted if it can be explained.
– Never confuse a hunch with a hope.
On the Occult:
– If astrology worked, all astrologers would be rich.
– A superstition need not be exorcised. It can be enjoyed, provided it is kept in its place.
On Optimism & Pessimism:
– Optimism means expecting the best, but confidence mean knowing how you will handle the worst. Never make a move if you are merely optimistic.
On Consensus:
– Disregard the majority opinion. It is probably wrong.
– Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.
On Stubbornness:
– If it doesn’t pay off the first time, forget it.
– Never try to save a bad investment by “averaging down”.
On Planning:
– Long-range plans engender the dangerous belief that the future is under control. It is important never to take your own long-range plans or other people’s seriously.
[Added Comment?]..In essence these axioms point to the benefit of having an investment strategy and sticking to it, regardless of what other investors say or do. If you don’t have an investment strategy, you could do worse than adopt these principles. However, don’t be afraid to add or subtract ones according to what works for you.
kiora
07-09-2016, 12:51 PM
.
Simple basic KISS strategy as KW's above is effective, why people don't make money is because they think they are smart and know more than MR Market...How many times have we heard on ST the sayings "Insto's caused this downturn once they stop it will rise back up" (suggesting the insto's are stupid) same goes for blaming smaller sellers with insulting names..Strangely enough most of this type of behaviour occurs during an established downtrend.
TA are visual aids and indicators to help one clarify the state of a Stock and simple rules such as KW's above help keep us investors away from potential trouble..and try to prevent optimistic blind investors (denial state) losing more of their money by jumping out of the frying pan into the fire (averaging down in TA broken stocks**)..** Not to be confused with buying/accumulation in dips. Averaging down is a good/lesser risk strategy when TA is not broken e.g Rising primary tide (Cyclic Bull Market Cycle)
I have a printed A4 sheet hanging on my investor workplace room at home.. I refer to it often so to make sure my thinking doesn't run off on a tangent.
My sheet is too tacky to photocopy but a better list is below which has the minor anxioms in order..
CAUTION:..be careful when researching Zurich Anxioms ..over the years people have butchered it with their own bias comments included and these butchered versions have become mainstream..
For many the Zurich Axioms seem to have less relevance today as investment strategies have improved ...hence the temption for them to butcher...What must be remembered is the Zurich Anxioms are an overall generalisation of Rules...and should be considered as a better than nothing alternative than an investor operating without any Strategy and subsequent discipline at all..
The "On Patterns" reference (Axiom) to Chartist illusions is again a broad generalisation which over alll is correct. As a Chartist I has always said the TA (chart patterns included) can not predict the future..In life nothing can predict the future...but as with the FA discipline, TA can be used as a probability (better guess) tool to favour a certain scenario outcome..
Unfortunately people misinterpret the Anxiom generalised meaning and their added personal biases can be seen in the comments...
See the Anxioms thread on ST HERE (http://www.sharetrader.co.nz/showthread.php?8664-The-Zurich-Axioms). the "On Pattern" Axiom shows that piece of butchering..obviously not a TA fan,,eh:)...and the bias commentator (not Lou) added the most reliant of all chart patterns (85% probability) as a 'squiggly line" as the "bad" example..hilarious...What I believe is mean't, is as it says Chart illusion...simple....Illusion in charts are very real as peoples visual perceptions of pictures differ and bias plays a big role..An expert chartist usually has a "trained eye" and they often criticse articles with false illusion which forces readers to only see that illusion.....Picture illusions can be great fun.."can you see Marilyn Munroe or like most of us see only a pretty version of Albert Einstein" ..The illusion works well and if the writer didn't mention Marlyn Munroe, would the readers see Marylin straight away with a cursory glance I would say not...With published charts in biased articles a quick glance from an expert chartist with a "trained eye" would most of the time pick that up......This is why "On Patterns" includes Chart illusions yes they can be dangerous..........
Repeated history patterns are rubbish?....Hmmm I would still take the cautious approach.
Not sure about the take profits to soon as TA discipline says let your profits run...but the generalisation is correct as the anxiom assumes you have a set strategy with accompanying discipline and set targets (e.g Target price trading)..failing to stick to your plan is of course a sign of emotion (greed).
As you read below..some of these sayings are familiar...they get mentioned a lot by TA commentators..eh
The Zurich Axioms:
Black type...Major Anxioms
Blue type...Minor Anxioms
On Risk:
– Worry is not a sickness but a sign of health – if you are not worried, you are not risking enough.
– Always play for meaningful stakes – if an amount is so small that its loss won’t make any significant difference, then it isn’t likely to bring any significant gains either.
– Resist the allure of diversification.
On Greed:
– Always take your profit too soon.
– Decide in advance what gain you want from a venture, and when you get it, get out.
On Hope:
– When the ship starts sinking, don’t pray. Jump.
– Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.
On Forecasts:
– Human behaviour cannot be predicted. Distrust anyone who claims to know the future, however dimly.
On Patterns:
– Chaos is not dangerous until it starts to look orderly.
– Beware the historian’s trap – it is based on the age-old but entirely unwarranted belief that the orderly repetition of history allows for accurate forecasting in certain situations.
– Beware the chartist’s illusion – it is characteristic of human minds to perceive links of cause and effect where none exist.
– Beware the gambler’s fallacy – there’s no such thing as “Today’s my lucky day” or “I’m hot tonight”.
On Mobility:
– Avoid putting down roots. They impede motion.
– Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia.
– Never hesitate to abandon a venture if something more attractive comes into view.
On Intuition:
– A hunch can be trusted if it can be explained.
– Never confuse a hunch with a hope.
On the Occult:
– If astrology worked, all astrologers would be rich.
– A superstition need not be exorcised. It can be enjoyed, provided it is kept in its place.
On Optimism & Pessimism:
– Optimism means expecting the best, but confidence mean knowing how you will handle the worst. Never make a move if you are merely optimistic.
On Consensus:
– Disregard the majority opinion. It is probably wrong.
– Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.
On Stubbornness:
– If it doesn’t pay off the first time, forget it.
– Never try to save a bad investment by “averaging down”.
On Planning:
– Long-range plans engender the dangerous belief that the future is under control. It is important never to take your own long-range plans or other people’s seriously.
[Added Comment?]..In essence these axioms point to the benefit of having an investment strategy and sticking to it, regardless of what other investors say or do. If you don’t have an investment strategy, you could do worse than adopt these principles. However, don’t be afraid to add or subtract ones according to what works for you.
Thanks Hoop
Al good reminders
Joshuatree
07-09-2016, 10:21 PM
Yes very good thanks Hoop esp for moi who has been oversupplied with spontaneity traits.
We are all guilty of disobeying the golden rules and breaking our disciplines and often its happens with success during a Bull market..That's the problem, during Bull market cycles we all get taught bad habits as often they pay off..
For the newer folk (investing for 7 years or less) who have yet to experience a tough market, they would think their bad habits would be not serious enough to hurt them..eh.
Sticking to discipline using TA to time entries and exits prevents most bad habits forming..
Im out. So long AIR. Its been a turbulent ride. Bought first round at $3.015 then a few times on the way down to around $2.05 at the lowest and then the last lot at $2.27 before the div was announced. Too big a gap to kake up and i dont have the time to wait. Unfortunate but im new to this and have learned a lot. I have a reasonably small amount of capital so have put it all in FNZ, MDZ, and DIV. Will continue to learn and build. Thanks to all for your comments, help and discussion on AIR over the last 4 months.
All thise still in, enjoy the ride and i wish you luck.
Im green at this game. How do you know when your not in a down trend? Are there indicators that the bottom has likely been reached?
I will probably buy back in if it goes to the $1.80 mark.
Hmmm...I wonder how many other less experienced investors have had there fingers burn't on this downtrending stock by getting sucked in with all the hype from certain members...Some are reputable members too and this annoys me...as I have to give advice saying "never trust anyone on ST not even high reputation members and because of my statement I have to include myself now ...so sad how the some ST threads can destroy all of our reputations..and fail to protect the newer less experienced investors..It use to be PEB but now the AIR thread can take the honours as being a portfolio dangerous place on ST
Enough on that subject as my feelings run hot and if I rant on I might get banned.
So..to adjust or not adjust?
The major consensus is yes..adjust
Adjust because most TAers use simple defaulted indicators and if you are in this category then adjust...Usually dividends are small and don't effect too much but occasionally you get the special dividends which can be sizeable (e.g AIR) and will play havoc on most indicators and result in firing false sell signals.
Sounds easy ..eh?..Actually the answer is maybe maybe not.....The problem is relying on the accuracy of the free data we acquire..Yahoo as far as I'm aware adjusts for dividends as a default but not for splits nor special dividends..so..over time yahoo data concerning large dividend yielding stocks could be viewed as a pile of crap rendering charts as junk..unfortunately Incredible Charts uses Yahoo for NZ stocks and NZ stocks are Globally well known as high yeilding stocks...so :p..
Luckily for us wanting freebies, Big Charts doesn't use Yahoo data so we can double check our program charts with Big Charts..
Of course all those problems disappear (mostly) If you use paid chart programs and buy raw data .g Metastock.....but as 90% of us are TA dabblers why pay out all this expense, when overall the free stuff although not accurate its is generally OK..
The disadvantages of adjustments are the true historic prices are no longer accurate,,e,g the chart shows highest (top) price was $3.84 5 years ago ..then someone writes on the forum saying that the chart is BS because I remember selling out at $4.05...so an argument develops over who's right and who's wrong...The answer is, both are right, but to a layman a newbie or a TA hater they will not except that answer as in their reality there can be only one right answer and so TA usually gets relegated to the "don't believe the squiggly lines stupidness" basket..
So...why use adjusted prices if they are not real...TA is based on trader behaviour and therefore TA indicators must not be warped by a ex dividend price or any other theoretical adjustment...Reasoning... the sudden drop is not due to investor behaviour its due to a theoretical price adjustment..
Can we use non adjusted data for charting?...Yes...I do this a lot when not relying on TA indicators... I am a Chartist and often work with chart patterns (see chart example below) that under certain circumstances is more useful using unadjusted than adjusted...Also theoretically adjusting the price downward before ex date (red dotted lines) can help to see invisible support and resistance line come into play...My chart example with AIR below relates to the question, "Will the market except the very big special dividend as positive news"..You don't look at the AIR thread to find market sentiment instead you DYO analysis and drawing a chart can help...e.g you see that the original opening price from on the day of the fantastic best ever result announcement (26th August) actually fell from $2.24 to $2.15 and looked to have broken support..But did it?...most TA'ers don't believe in pre-adjustments but I do find them useful under certain circumstances, this time I found that the $2.15 - $0.35 = $1.80 ex div happened to be the major support..once the price reached that 2.15 it slowly rose indicating a rare buy signal on my personal pre-adjusted chart....
I drew the chart on announcement day with the beginning of the red dotted lines added being the morning of the 26th August and the 2.15 pre-adjusted to 1.80 after the 0.35c div announcement result...
My continuing red line was a possible outcome line...reasoning,why I should be predicting a possible future when I say TA can't predict futures?....A H&S pattern is the most common of patterns and also happen the be the most reliable...so with AIR announcing less profit next year logic says possible a bear pattern scenario should be studied..if AIR deviates away from the pattern who cares no harm done and also it could indicate AIR is moving in a bullish way...
Anyway the chart is below with its possible un-adjusted scenario...un-adjusted because I pre-adjusted it before ex div..
Also another reason to leave the share price with special dividends + dividends un-adjusted is when we are using the chart for capital information (remember adjust to find market (behaviour) information)..The reasoning here is that AIR has taken a $400M financial hit..the chart viewpoint with un-adjusted price data is unbiased analysis..it does matter if the money when to shareholders, tax penalties, asset write down or lost by fraud..it is viewed as AIR being suddenly $400M poorer...
Un-adjusted charts can have all sorts of patterns, some show caution which can be masked on adjusted charts.
So do you adjust charts for dividends etc?.....answer, yes, no,.... maybe:D
Chart below was drawn on the 26th August and sent to 3 ST members who PMed me confirming if my charts like theirs were triggering a sell signal..my reply was my chart below is saying the announcement drop is probably a short term buy opportunity and the opportunity window is starting to close with DYO analyses disclosure:D
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2025082016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2025082016.png.html)
Baa_Baa
22-09-2016, 10:48 AM
Good post Hoop. We strayed into this very topic on AIR when I posted a monthly price chart. OldGuy reckons it is "flawed" and "misleading" because it does not include dividends, and therefore it is bogus TA. I disagreed.
8322
I think that where the difference in opinion comes about is that a price chart is true to the 'market price' of the shares, which is useful or some might say essential, for choosing buy or sell points. The market price is what we pay or get, it is the price now and the chart shows that historically. We can only buy or sell the market price which is what TA charts.
Including dividends is a 'value' view, the gross value, similar to an Index, which may be of interest to an investor, assuming they add the dividend to the share price. It is a portfolio view, like ShareSight for example includes value charts over time. I don't see the relevance to TA.
There are all sorts of TA ways, not just the well known conventional types ...
Most investors rely on FA with a passing curious interest with TA, they may use the common variety TA to support their view to buy a stock..if TA doesn't support their view many still buy that stock anyway :cool:..in other words when it comes to buying and selling, push or shove, they trust their own decisions, emotions and all, over that of TA ..
Most investors only see the Universal "best fit" chart default indicators... they have a quick look and if the indicators don't conform with their stocks they disregard the entire TA discipline as nothing more than squiggly lines..To other investors that treat TA more seriously or sympathetically the acid test is to ask yourself "Could you buy a stock/company that you have absolutely no idea what it does based solely on a mass of sudden triggered TA buy signals?".
Back to indicators with default values....As every investor knows..there's no such thing as a normal value..life couldn't be any further away from a perfect world... so theories are guidelines...same for FA..same for TA ...charting programs contain indicators with default values that are set with the medium term in mind together with a "universal best fit" back test result ...therefore they too are considered the guidelines...
For many stocks a "universal best fit" default is not good enough...and many of us TAer's act as detectives and tinker with the indicator values to " individually best suit" our stock that we are interested in..Some Free charting programs allow indicator values to be changed. Incredible Charts is one..All one needs to do is understand how the indicator formulae works and how to change the settings the correct way..See Incredible chart website (https://www.incrediblecharts.com/topic/Indicators_A_to_Z) e.g click on Accumulation Distribution (indicator), then scroll down that new opened page to setup and Edit indicator settings...
All investors should remember that Price on a chart is also a chart indicator and most investors are used to the price being altered to allow for dividends etc,,,so why not other indicators...eh?
Altering indicator values to suit is fun...All TA investors should at least try it..some TAer's have made a lot of money out of custom fitting their stocks investments....Some TAer's with sophisticated chart programs (Metastock) formulate many indicators together to form one super indicator..the realms of possibilities are endless...
A few years ago a ST member (I think it was Trackers) used 2 moving averages together I think one was MA165 not sure of the other MA?? (30?) ..anyway the crossovers were the signals and he found it was very successful with certain stocks....Most of us know about the MA200/MA50 crossovers the Golden and Death Crosses which most TAer's find the signals fire too late to be useful (the stable door is open and the horses have already bolted :()..It is used as a longer term indicator but it's not uncommon to see a Death Cross (bearish) replaced by a Golden Cross (bullish) a few weeks later because the price went up not down...
So BaaBaa..we should be allowed to fiddle around with the chart price to suit us best, and if back testing says its a very successful unconventional indicator, then it's very hard for the Purists and the lesser informed folk to say our methods are wrong....eh?
Maybe.. in the future, us TAer's may get to use the BaaBaa indicator :D............I jest not... as it has been done before on ST.... TA Guru Phaedrus developed a very good super indicator, arguably the world's best MSI (Market Strength Indicator) to use with the Metastock Chart program..He used to publish MSI charts (mostly NZX50 AORDS indexes) on this Forum..sadly most of his charts have since expired and can't be viewed anymore:(...
Here you go, a Monthy chart. Sometimes it helps to step back and look at the long term, this is the monthly chart. It's not really all that encouraging is it? To me it looks like 1.80 - 1.75 is pretty good support but who knows what will happen below that. Probably nothing to do with AIR fundamentals, more about SP risk reward at this stage.
8321
I'm sorry, but this chart (and your interpretation of it) is totally flawed/misleading because it isn't adjusted for the massive dividend just received by all holders. I really hope people don't make TA decisions by putting silly lines on unadjusted charts like this. I mean, really!
So, how do you interpret the 35c drop caused by the dividend, which shows as a massive negative red candle? The chart gives the impression of a very bad turn of events, which is clearly misleading. But yeah, you keep doing what you do. TA can certainly be useful when done properly, which your chart is not (IMHO).
Hmmm ..I hope I don't regret posting this...The last thing I want is to devalue KW's thread..and don't want to be seen as disrepectful of Old Guy's opinions of TA..Everyone has differing interpretations, opinions and viewpoints...
First things first.... this is my viewpoint....BaaBaa has presented a AIR chart that has Yahoo data. Yahoo data I'm told has price adjustments for dividends, but not for Special Dividends, nor splits/consolidations there doesn't appear to be any adjustment tool available on IC using Yahoo data...but this is not necessarily a bad thing...as the chart is constructed as a "near capital" price chart..I'm personally fond of Pure Capital price charts (rare on free web charting programs)..as they show the historic real shareprice, the same price you see on your portfolio..the price you paid to buy the share, the price you received for selling the share....not some fancy calculated by equation adjusted price...
Capital price Chart should line up with the bought/sold prices in your Stock Portfolio and show the historic rise and fall (trends) of the real price...An investor can look back in history and relate chart price with portfolio price and do appropriate analysis....My portfolio has extended windows to show dividends and specials and other types of cash flow and its all totaled up...so no need for adjustment of chart prices
Old Guy quote: "...The chart gives the impression of a very bad turn of events, which is clearly misleading..."
Hmmm...depends on which side of the fence you are on....On a Capital price chart I disagree..it is not misleading..Air as a company did suffer a bad event, it lost $392 Million and about $22 Million more in staff bonuses and miscellaneous bits and pieces..The market takes a rational viewpoint, it saw AIR ~$410M poorer as of 8th September and the market price corrected accordingly....The market doesn't care if that money went to IRD, Justice Department as a fine, got stolen, or given away to shareholders..There is no argument AIR is ~$410M poorer..it happened......Many use an assumption argument that AIR will gain that amount back in 2017...maybe it will...maybe it won't...As it hasn't happened yet it can not be 100% factored in...The market will anticipate something as markets are forward looking..maybe the AGM will give the market a 2017 disclosure and the market capital price will factor that disclosure in...but until the market re-rates on upcoming news, the AIR share price will continue to reflect that $410M financial hit..
The unadjusted share price re: dividend can trigger sell signals...Often they don't...In AIRs case the special dividend was very large and it did triggered the sensitive indicators the stoch's the DMI..The momentum was hit after ex date more likely due to lack of dividend hunters..The money flow indicators did not react much..so overall the very large special dividend did not trigger sell signals on masse...
Also, something to watch for is a company over-extending its payout to it's shareholders ..if the payout is too large and the market perceives that action will hurt future growth performance of the company it will show up much clearer on an unadjusted price chart....
So yeah Capital Price charts are an useful tool in all sorts of ways ....A Chartist can be a detective and dig into deep history decades ago in finding out of how much a certain person spent on a certain share buy ups/sell downs...something which can't be done with adjusted price data charts..When it comes to history a chart is worth more than a 1000 words.
There's always pluses and minuses...The other side of the coin is adjusted charts...They are important so the TA price factor indicators don't become unreliable and trigger false sell signals.. A TAer will need to adjust the price chart so not to make a wrong TA decision.....One flaw with adjusting price charts over a long period of time is a chartist doesn't know the real price of tops bottoms, gaps or any trigger price in between..so S&R lines can be a causality...
The biggest flaw is human error to interpret its correct uses, most people use adjusted charts as Capital charts with the assumption that all dividends, special dividends,etc are reinvested back into the company by the shareholder.....This we all know doesn't happen as most investors use dividends as disposable income...therefore adjusted price charts creates an undetectable capital bias...
Then (apologies to Old Guy) we get investors arguing about which TA price method to use..most are due to self - interest, especially intense arguments when the investor sees their investment tracking the downtrend and the un-adjustment makes it seem worse..but really it you wanted a very large special dividend then you should be prepared for a large price correction on ex div day...wouldn't you think??..yeah yeah we all know the price went down but you got compensated, us TA investors aren't stupid..
Non-Adjustment makes a shareholder investment seem worse....Yes true... the dividend may make up for the capital loss..but it's only entirely true if and only if that dividend (capital converted to cash) is re-invested (converted back to Capital)..For an investor who holds that stock it makes them feel better to see an adjusted price chart...eh?
So who's right in this AIR thread argument BaaBaa or Old Guy?.....Answer both!!..
How useful is their argument regarding AIR on the AIR thread?....Answer About as useful as tits on a bull.
Which method is better adjusted or unadjusted ?? ..Answer... both have their uses.
Which method would a TAer prefer?....."ummmm..let me flip a coin....If a TAer is mostly reliant on TA indicators then adjusted price is better. Most investors use simple TA with basic default indicators so I would take an educated guess and say 85% of investors would vote for adjusted price charts as being better......A Chartist like me, would vote unadjusted price charts as better option.. again it is self interest as I use chart pattern analysis.. a lot of S&R lines analysis and look for gaps.eg Common gaps, breakaway gaps, exhaustion gaps, runaway gaps, dividend gaps...(ahh..hahh dividend price gaps!!! ..yep now you got the picture..eh :):D:D)
Addition: Here is the AIR thread link to Paper Tiger's Adjusted Non -adjusted AIR chart comparisions (http://www.sharetrader.co.nz/showthread.php?1088-AIR-NZ/page592).. since that post the adjusted price chart has broken its medium term up trend.
Thanks Hoop - good post, appreciate all the effort you go to:cool:
dobby41
23-09-2016, 08:11 AM
I think that is about the sum of it Hoop - nice summary.
Chart below was drawn on the 26th August and sent to 3 ST members who PMed me confirming if my charts like theirs were triggering a sell signal..my reply was my chart below is saying the announcement drop is probably a short term buy opportunity and the opportunity window is starting to close with DYO analyses disclosure:D
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2025082016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2025082016.png.html)
The old chart is showing some interesting stuff.....
Hmmm...bounced of 178.5 this morning...The trading price (TP) estimated was 178..Hmmm a short term buy?..I wonder if my drawn in support (a confirmed neck line??) at 180 should be lowered to 178...The depth data says no as there is weak support now at 180 and also 170 ,175..This depth behaviour could be fickle ... looks like small investor nibbling around emotional price levels (the 5c multiples) rather than analyzed price figures...probably a sign todays AIR market is currently in limbo..
Disc: staying away..not buying
Its too close to call yet if there has been a Complex Head / single shoulder pattern formed ...If the neck line (~1.80) has broken (H&S pattern formed), that's bad news..
The price bouncing off 1.785 this morning is a positive sign...Price/volume bars shows weak support though..and it doesn't show any window of opportunity to buy in at this stage (Mon 12.43pm)..
Update:..12.49pm...That 1.805 leveling off looks like a resistance forming..the Price/volume bars are suggesting this also. ...Hmmm the thoughts of a 1.80 neckline is a worry
Self updating Interactive 5day 15min period chart below (20 min delay)
http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=NZ%3aAIR&uf=32&type=4&size=4&sid=964355&style=320&freq=7&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=3&rand=1047601788&compidx=aaaaa%3a0&ma=2&maval=50&lf=1024&lf2=32&lf3=4&height=981&width=1045&mocktick=1
Hmmm...bounced of 178.5 this morning...The trading price (TP) estimated was 178..Hmmm a short term buy?
The self dating chart above has showed 1.78 as the bottom and so a new weak support I still favour the 1.80 support zone but have knowledge the support is a more of a zone area than a sharp line..
I use short term analysis to compliment my Medium/long term charting..Timing and risk control is buying near supports and not buying near resistances.. When I see a major support that I think will hold e.g Bull Market Correction a short term (secondary or tertiary) down trend within a long term (primary) up trend, I check the short term stuff..if the short term shows a reversal I buy with in strict stop/loss controls..
I also use the short term chart if I'm going to buy a stock today...If the stock shows weakness I hold off buying until later in the day..or tomorrow.. by using the short term chart I often pick up that stock a few cents cheaper (saving me several hundreds of Dollars)..
Why did I not buy AIR at 1.79/1.80?...In hindsight seeing it at 1.85 it seems I missed an opportunity..however I have my discipline rules..AIR is in a primary down trend..AIR has a high Beta Coefficient value (as do other cyclicals)..the two together heightens the risk of sudden drops, after sudden rises therefore any tertiary rally (as seen today on a short term chart above) contains more risk of ending ones investment..caught up in a stop/loss whipsaw..That risk/reward is presently above my discipline guidelines..
A primary uptrend together with a high Beta Coefficent value makes a excellent two edged sword combo giving most cyclical stocks a fantastic quick profit investment to its investors ...sadly AIR is not in a primary uptrend.
Note: As most of us are medium to long term investors..the above very basic short term TA chart should be used only as a quick/sensitive indicator tool (do not rely one one tool only).. only gives the investor a better insight to buy into their favourite stock nearer the bottom of a weakness.
Relying on only short term stuff may offer a much higher reward but it comes at a cost of a much higher risk in doing so...an investor is more prone to being whipsawed to bits.....Analysis shows medium term activity (lesser reward/lesser risk) is more profitable overall than short or long term activity).....Short term stuff is best left to the higher frequency traders with better charting programs using real time data streams..
Daily default indicators (medium term) within the daily charts are commonly illustrated on ST.. AIR's rally to $1.85 has not fired those buy signals yet...
Zouga
30-09-2016, 08:01 AM
Hi all
AIR is fascinating and although a good one to learn on I am looking for an entry point to top up my SUM. I follow KW's
simple easy to follow guidelines and have stayed out while the share price has fallen. I need to keep waiting as the share price hadn't even fallen below the 50 day MA let alone started to turn back up, but my finger is itching on the trigger as the price casually inches lower. I wonder what others think regarding a good time to top up? My experience with aAIR and hype has taught me to WAIT! But that share price will need to rise quite a way yet before I gain back the cost of that lesson.
Hi all
AIR is fascinating and although a good one to learn on I am looking for an entry point to top up my SUM. I follow KW's
simple easy to follow guidelines and have stayed out while the share price has fallen. I need to keep waiting as the share price hadn't even fallen below the 50 day MA let alone started to turn back up, but my finger is itching on the trigger as the price casually inches lower. I wonder what others think regarding a good time to top up? My experience with aAIR and hype has taught me to WAIT! But that share price will need to rise quite a way yet before I gain back the cost of that lesson.
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
4517
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
4518
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
4519
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
4520
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
Hi Zouga
I have added KW's opening post on this thread as her valuable reference to which I think you are modelling off...Am I correct in assuming this?..
If you are following KW's basic model then it tells you not to accumulate SUM at this moment with the price at $5.23...It's tempting I know as SUM is resting on the EMA50 support line (also the MA50 line).. I use EMA50 because it is a little more sensitive than MA50 to recent price changes..But there's not much difference comparing the two on the SUM chart (I have not used MA50 on the chart below)..
I have gone a little crazy with the chart below..It is always a good idea to have a few extra (not too many) indicators to confirm one against the other..therefore when signals suddenly occur, a mass confirmation is a very strong signal that must be acted upon..When a stock such as SUM meanders around on a slow downtrend a TAer applies patience.. discipline!!!...wait for the signs...as you see on the chart below most of the time when the buy signals fire off you have not lost much in opportunity.....as always with TA you lose a little bit of opportunistic profit when opting for a lower risk strategy. KW's Model is close to the maximum return for risk/reward strategy..
I'll let use digest the other indicators I have added....google where necessary or post questions and I will answer them.
SUM Status....HOLD, DON"T ACCUMULATE YET............SUM had been in a rising SD channel since listing 5 years ago suffering only one 6 month bear cycle during 2014. Since then SUM has been and still is, in a bull cycle with loose bullish scallop pattern type rises (inverted fish hooks)..These are healthy breathers for a stock after a quick run up (rally). At the moment SUM is in weakness (another breather?) short term downtrend with a hint of a bottoming (not reliable)..watch for a MA50 break it can and often happens during a bull cycle correction (breather)..SUM's recent behaviour has seen respect for the MA50 line..If the MA50 breaks it should be observed as a caution sign, it is not the end of the world as often these are nothing more sinister than extended breathers after a hard run up...
One charting observation which should be regarded as a caution is SUM has had an unusual change in its behaviour ..since March 2016 it's behaviour has become more votatile ...Even though SUM has altered its behaviour it is still showing TAer's with much respect..It is a well behaved TA stock.
http://i458.photobucket.com/albums/qq306/Hoop_1/SUM%2029092016.png (http://s458.photobucket.com/user/Hoop_1/media/SUM%2029092016.png.html)
Baa_Baa
08-10-2016, 11:44 AM
@skid, ref your post on AIR thread re TA supports. Hoop nailed it with his chart 26 August. Tips hat in Hoops direction.
Hmmm...I wonder how many other less experienced investors have had there fingers burn't on this downtrending stock by getting sucked in with all the hype [snip]
Chart below was drawn on the 26th August [snip]
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2025082016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2025082016.png.html)
Hi Hoop, and all posters,
SUM seems all good to me to buy up just now , what do you think ? Thanks for you previous posts i learn so much from you efforts here,
I am seriously re-evaluating my strategies after WYN. I came away with a profit But learnt a lot too.
SUM has turned a corner i think , or too soon yet? Great company i think , good P/E just now, EPS climbing up annually RSI turning up and MACD too.
Oh well, SP just answered my question i think , should have bought yesterday !,,!
Joshuatree
25-11-2016, 12:53 PM
Need to keep reminding myself:)
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
4517
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
4518
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
4519
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
4520
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
...............
Un-adjusted charts can have all sorts of patterns, some show caution which can be masked on adjusted charts...............
So do you adjust charts for dividends etc?.....answer, yes, no,.... maybe:D
Chart below was drawn on the 26th August and sent to 3 ST members who PMed me confirming if my charts like theirs were triggering a sell signal..my reply was my chart below is saying the announcement drop is probably a short term buy opportunity and the opportunity window is starting to close with DYO analyses disclosure:D
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2025082016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2025082016.png.html)
An update....AIR's share price is behaving nicely and exactly as predicted (so far)...Back in August 2016 I had taken a view that AIR's shareprice (unadjusted) has topped out and most common topped out behavioural pattern is a H&R pattern so with a better than a 50% - 50% chance of a H&S pattern forming an chartistist can begin operating an odds on investment play by buying AIR (less risky when the $1.80 support [the neck] is confirmed)..The idea is to keep to the investment plan until AIR's behavioural habits change course away from its predicted course (red dotted line).. until then AIR continues to be an accumulation/hold..Note however that AIR is now halfway up the imaginary right hand shoulder of the on going formation of a possible Head and Shoulder pattern so assuming the more common symmetrical version of the H&R pattern (Right shoulder formation mirrors the left shoulder) accumulating more AIR should now begin to be curtailed back as risk is becoming higher than the reward...Once AIR reaches 2.20 - 2.30 area it's decision time whether to realise the 20% capital gain or watch for a bullish behavioural deviation away from the predicted path (red dotted line) (buy signal) or wait for the TA sell signals and give some capital gains back to the market.
Note on the updated overlay the steep drop as predicted (red dotted line), when using an unadjusted price chart some predictions are 100% certain (e.g 35c drop being the announced dividend + Special)
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2028112016_1.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2028112016_1.png.html)
Beagle
30-11-2016, 09:20 AM
Need to keep reminding myself:)
Yes a timely reminder, thanks. She is a wise one well beyond her years. Gone but definitly not forgotten.
An update....AIR's share price is behaving nicely and exactly as predicted (so far)...Back in August 2016 I had taken a view that AIR's shareprice (unadjusted) has topped out and most common topped out behavioural pattern is a H&R pattern so with a better than a 50% - 50% chance of a H&S pattern forming an chartistist can begin operating an odds on investment play by buying AIR (less risky when the $1.80 support [the neck] is confirmed)..The idea is to keep to the investment plan until AIR's behavioural habits change course away from its predicted course (red dotted line).. until then AIR continues to be an accumulation/hold..Note however that AIR is now halfway up the imaginary right hand shoulder of the on going formation of a possible Head and Shoulder pattern so assuming the more common symmetrical version of the H&R pattern (Right shoulder formation mirrors the left shoulder) accumulating more AIR should now begin to be curtailed back as risk is becoming higher than the reward...Once AIR reaches 2.20 - 2.30 area it's decision time whether to realise the 20% capital gain or watch for a bullish behavioural deviation away from the predicted path (red dotted line) (buy signal) or wait for the TA sell signals and give some capital gains back to the market.
Note on the updated overlay the steep drop as predicted (red dotted line), when using an unadjusted price chart some predictions are 100% certain (e.g 35c drop being the announced dividend + Special)
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2028112016_1.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2028112016_1.png.html)
Thanks Hoop.
Baa_Baa
31-12-2016, 10:46 AM
An update....AIR's share price is behaving nicely and exactly as predicted (so far)...Back in August 2016 I had taken a view that AIR's shareprice (unadjusted) has topped out and most common topped out behavioural pattern is a H&R pattern so with a better than a 50% - 50% chance of a H&S pattern forming an chartistist can begin operating an odds on investment play by buying AIR (less risky when the $1.80 support [the neck] is confirmed)..The idea is to keep to the investment plan until AIR's behavioural habits change course away from its predicted course (red dotted line).. until then AIR continues to be an accumulation/hold..Note however that AIR is now halfway up the imaginary right hand shoulder of the on going formation of a possible Head and Shoulder pattern so assuming the more common symmetrical version of the H&R pattern (Right shoulder formation mirrors the left shoulder) accumulating more AIR should now begin to be curtailed back as risk is becoming higher than the reward...Once AIR reaches 2.20 - 2.30 area it's decision time whether to realise the 20% capital gain or watch for a bullish behavioural deviation away from the predicted path (red dotted line) (buy signal) or wait for the TA sell signals and give some capital gains back to the market.
Note on the updated overlay the steep drop as predicted (red dotted line), when using an unadjusted price chart some predictions are 100% certain (e.g 35c drop being the announced dividend + Special)
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2028112016_1.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2028112016_1.png.html)
Very close now.
Beagle
31-12-2016, 03:29 PM
An update....AIR's share price is behaving nicely and exactly as predicted (so far)...Back in August 2016 I had taken a view that AIR's shareprice (unadjusted) has topped out and most common topped out behavioural pattern is a H&R pattern so with a better than a 50% - 50% chance of a H&S pattern forming an chartistist can begin operating an odds on investment play by buying AIR (less risky when the $1.80 support [the neck] is confirmed)..The idea is to keep to the investment plan until AIR's behavioural habits change course away from its predicted course (red dotted line).. until then AIR continues to be an accumulation/hold..Note however that AIR is now halfway up the imaginary right hand shoulder of the on going formation of a possible Head and Shoulder pattern so assuming the more common symmetrical version of the H&R pattern (Right shoulder formation mirrors the left shoulder) accumulating more AIR should now begin to be curtailed back as risk is becoming higher than the reward...Once AIR reaches 2.20 - 2.30 area it's decision time whether to realise the 20% capital gain or watch for a bullish behavioural deviation away from the predicted path (red dotted line) (buy signal) or wait for the TA sell signals and give some capital gains back to the market.
Note on the updated overlay the steep drop as predicted (red dotted line), when using an unadjusted price chart some predictions are 100% certain (e.g 35c drop being the announced dividend + Special)
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2028112016_1.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2028112016_1.png.html)
That's what I intend doing. Will hold until I see a 3 day confirmed break below 100 day MA, whenever that occurs either sooner or later and then sell the lot.
Hi Zouga
I have added KW's opening post on this thread as her valuable reference to which I think you are modelling off...Am I correct in assuming this?..
If you are following KW's basic model then it tells you not to accumulate SUM at this moment with the price at $5.23...It's tempting I know as SUM is resting on the EMA50 support line (also the MA50 line).. I use EMA50 because it is a little more sensitive than MA50 to recent price changes..But there's not much difference comparing the two on the SUM chart (I have not used MA50 on the chart below)..
I have gone a little crazy with the chart below..It is always a good idea to have a few extra (not too many) indicators to confirm one against the other..therefore when signals suddenly occur, a mass confirmation is a very strong signal that must be acted upon..When a stock such as SUM meanders around on a slow downtrend a TAer applies patience.. discipline!!!...wait for the signs...as you see on the chart below most of the time when the buy signals fire off you have not lost much in opportunity.....as always with TA you lose a little bit of opportunistic profit when opting for a lower risk strategy. KW's Model is close to the maximum return for risk/reward strategy..
I'll let use digest the other indicators I have added....google where necessary or post questions and I will answer them.
SUM Status....HOLD, DON"T ACCUMULATE YET............SUM had been in a rising SD channel since listing 5 years ago suffering only one 6 month bear cycle during 2014. Since then SUM has been and still is, in a bull cycle with loose bullish scallop pattern type rises (inverted fish hooks)..These are healthy breathers for a stock after a quick run up (rally). At the moment SUM is in weakness (another breather?) short term downtrend with a hint of a bottoming (not reliable)..watch for a MA50 break it can and often happens during a bull cycle correction (breather)..SUM's recent behaviour has seen respect for the MA50 line..If the MA50 breaks it should be observed as a caution sign, it is not the end of the world as often these are nothing more sinister than extended breathers after a hard run up...
One charting observation which should be regarded as a caution is SUM has had an unusual change in its behaviour ..since March 2016 it's behaviour has become more votatile ...Even though SUM has altered its behaviour it is still showing TAer's with much respect..It is a well behaved TA stock.
http://i458.photobucket.com/albums/qq306/Hoop_1/SUM%2029092016.png (http://s458.photobucket.com/user/Hoop_1/media/SUM%2029092016.png.html)
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
What has happened since the post above??..
Very long term charting summary:...SUM has been in an up trending SD channel since listing over 5 years ago and the share price has gained over 300%
Medium term to the present summary...(refer to chart below)...A week after the 29th September chart posting (the chart above) SUM's TA wheels fell off triggering medium term sell signals (ema50 & 100 breaks adding to the list of breaks) The new bottom ($4.58) respected the MA200 and the subsequent rally in late November ended up being disappointing, triggering buy signals only to see investors getting burnt (Bull Trap). That rally was a sucker type and was quickly confirmed as such on the 8th December when the MA200 line broke indicating SUM had entered into a Technical bear market cycle...
Since the 8th of December we have seen another bottoming out at $4.45 and this latest rally looks to be wilting at the resistance conjunction point of $4.70 where the MA50 ema50 the new confirmed downtrend line and the $4.77 resistance line (not marked in the last chart) meet. Also there at $4.77 are the Ema 100 and MA200 lines..Conjunction resistances are powerful areas to break through and requres large buying pressures..The momentum (momentum indicator not shown but the MACD is shown) at present shows not much buying pressure to speak of and with the price at $4.61 the falling wedge threatening upward breakout (which is now due..Bulkowski) looks in doubt.
The falling Wedge pattern is a poor performing pattern but does have a 68% chance of an upward breakout...Being noted as a poor performer any upward breakout has to continue onwards and upwards to over $5.00 to alleviate sucker rally fears..even as a poor performing breakout the falling wedge pattern is still seen as a buy signal, however it is prudent to wait for further buy signals (The already triggered MACD may be a tad to quick) to help confirm such as the DMI which it seems will trigger about the same time as the EMA100 and MA200 resistance breakouts..If that happens, both medium and long term investors will enter around the same time which in theory should provide larger than "normal" buying pressure....
Until then we should wait so to minimise another downward risk.
http://i458.photobucket.com/albums/qq306/Hoop_1/SUM%2012012017B.png (http://s458.photobucket.com/user/Hoop_1/media/SUM%2012012017B.png.html)
McGinty
02-02-2017, 01:18 PM
Have come across a new group on Facebook that is focused to Momentum and Technical entries. There could be some past contributors to this thread that continue to share their wisdom/lessons.
Though I would share in the interest of everyone who is keen to continue learning :)
https://www.facebook.com/groups/919003914837050/
Have come across a new group on Facebook that is focused to Momentum and Technical entries. There could be some past contributors to this thread that continue to share their wisdom/lessons.
Though I would share in the interest of everyone who is keen to continue learning :)
https://www.facebook.com/groups/919003914837050/
More TA discussion about PPH on facebook (see link above)
Disc: holding PPH
http://i458.photobucket.com/albums/qq306/Hoop_1/PPH%2016022017.png (http://s458.photobucket.com/user/Hoop_1/media/PPH%2016022017.png.html)
An update....AIR's share price is behaving nicely and exactly as predicted (so far)...Back in August 2016 I had taken a view that AIR's shareprice (unadjusted) has topped out and most common topped out behavioural pattern is a H&R pattern so with a better than a 50% - 50% chance of a H&S pattern forming an chartistist can begin operating an odds on investment play by buying AIR (less risky when the $1.80 support [the neck] is confirmed)..The idea is to keep to the investment plan until AIR's behavioural habits change course away from its predicted course (red dotted line).. until then AIR continues to be an accumulation/hold..Note however that AIR is now halfway up the imaginary right hand shoulder of the on going formation of a possible Head and Shoulder pattern so assuming the more common symmetrical version of the H&R pattern (Right shoulder formation mirrors the left shoulder) accumulating more AIR should now begin to be curtailed back as risk is becoming higher than the reward...Once AIR reaches 2.20 - 2.30 area it's decision time whether to realise the 20% capital gain or watch for a bullish behavioural deviation away from the predicted path (red dotted line) (buy signal) or wait for the TA sell signals and give some capital gains back to the market.
Note on the updated overlay the steep drop as predicted (red dotted line), when using an unadjusted price chart some predictions are 100% certain (e.g 35c drop being the announced dividend + Special)
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2028112016_1.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2028112016_1.png.html)
Updated the chart (manually)..The unadjusted chart is behaving surprising well especially that 2.08 unadjusted support line..
Also in play is the 2.28 support..remember AIR's shareprice is going to be 10c less at the commencement of ExDate (Thursday 9th March)...if AIR hangs around the 2.40 price then goes ex date that 2.28 support is a valuable floor and could be a bullish outcome..
Looking at the latest unadjusted weekly chart it is showing attempts to bust through the bull/bear line at $2.40 (2.41)..If it achieves that goal (remember the 10c hit at ex-date) then AIR becomes an unadjusted Bull and the Bear dies...I mention the unadjusted Bull because on the "normal" adjusted charts chart AIR regained Bull status at $2.20 back on the 4th January 2017 (Price above MA200). The difference (adjusted/unadjusted) is one confirming the other..
Another interesting development pointed out to me today by a ST member (via PM) was the formation of an inverted H&S pattern (bullish)...I had not seen the pattern as it is nearly undetectable on the adjusted daily chart...but it is clearly visible on the adjusted weekly chart..The neckline broke at ~$2.25 7 days ago creating a bullish Target price of 2.25 + (2.25 - 1.75) = $2.75.. (Note:- the chart below sees a 4 pointed resistance line at 2.70 ..not drawn in)
Referring to the unadjusted chart below that inverted H&S pattern doesn't exist but its effects may be seen as a predictor that the break out above $~2.41 has a good chance of happening and the big H&S that is still forming will cease to exist ending my dotted line prediction to the rubbish bin...Therefore armed with these different sets of Technical charts..Even though the chart below still has a forming H&S pattern in play (just) and the AIR shareprice is at those resistance points, overall the differing charted TA disciplines are saying don't sell as indicators and patterns remain bullish
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR02032017.png (http://s458.photobucket.com/user/Hoop_1/media/AIR02032017.png.html)
Snow Leopard
02-03-2017, 11:35 PM
Your post appears to be about the second quarter down of the right most twelfth of that probably over annotated chart (but with a log price axis:t_up:).
Any chance we get a more focussed rendering?
Best Wishes
Paper Tiger
Joshuatree
23-05-2017, 09:28 PM
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
4517
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
4518
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
4519
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
4520
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
Reminding myself and anyone else its useful for. HLG ,SUM ,RYM looking shaky for ex re getting in sell zone T/A wise. Others?
TGH released its full year results today and it's been mentioned by management that it is still on track from the December HY interim results which saw TGH share price drop from $1.55 to $1.30...so reading between the lines and taking Management at their word one would assume that the fair price would be around the $1.30 mark.. but it's not to be... as the share price ex announcement today has been a non event.. ($1.15 +1c )
Chart TA is showing mixed signals...The rally from the 1.05 bottom seems to be showing that this time is different as the TA indicators are showing some promise for the first time since the downtrend started back near the IPO. This gives a hint that maybe the 1.05 is the true bottom....However a few days before the FY Results announcement TGH's rally (which had promise after it broke through it's first resistance level) failed at the second resistance point which just happened to be a conjunction area (trend line + EMA110 +resistance line) which indicated a screaming TA chart must sell signal...but since then the announcement did not cause a gap down... so what's happening??..Those early TAers have probably sold a day or two ago will now be watching too...What we do know is TGH is still in a downtrend trend and this latest sucker rally seems to be played out so we wait on the side-lines until the next positive signals arrive.
TGH is very TA friendly, so breaks and failurers should be taken seriously.
http://i458.photobucket.com/albums/qq306/Hoop_1/TGH%2027062017.png (http://s458.photobucket.com/user/Hoop_1/media/TGH%2027062017.png.html)
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
What has happened since the post above??..
Very long term charting summary:...SUM has been in an up trending SD channel since listing over 5 years ago and the share price has gained over 300%
Medium term to the present summary...(refer to chart below)...A week after the 29th September chart posting (the chart above) SUM's TA wheels fell off triggering medium term sell signals (ema50 & 100 breaks adding to the list of breaks) The new bottom ($4.58) respected the MA200 and the subsequent rally in late November ended up being disappointing, triggering buy signals only to see investors getting burnt (Bull Trap). That rally was a sucker type and was quickly confirmed as such on the 8th December when the MA200 line broke indicating SUM had entered into a Technical bear market cycle...
Since the 8th of December we have seen another bottoming out at $4.45 and this latest rally looks to be wilting at the resistance conjunction point of $4.70 where the MA50 ema50 the new confirmed downtrend line and the $4.77 resistance line (not marked in the last chart) meet. Also there at $4.77 are the Ema 100 and MA200 lines..Conjunction resistances are powerful areas to break through and requres large buying pressures..The momentum (momentum indicator not shown but the MACD is shown) at present shows not much buying pressure to speak of and with the price at $4.61 the falling wedge threatening upward breakout (which is now due..Bulkowski) looks in doubt.
The falling Wedge pattern is a poor performing pattern but does have a 68% chance of an upward breakout...Being noted as a poor performer any upward breakout has to continue onwards and upwards to over $5.00 to alleviate sucker rally fears..even as a poor performing breakout the falling wedge pattern is still seen as a buy signal, however it is prudent to wait for further buy signals (The already triggered MACD may be a tad to quick) to help confirm such as the DMI which it seems will trigger about the same time as the EMA100 and MA200 resistance breakouts..If that happens, both medium and long term investors will enter around the same time which in theory should provide larger than "normal" buying pressure....
Until then we should wait so to minimise another downward risk.
http://i458.photobucket.com/albums/qq306/Hoop_1/SUM%2012012017B.png (http://s458.photobucket.com/user/Hoop_1/media/SUM%2012012017B.png.html)
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
28th June 2017 post
Just after my last SUM post and chart (above)... Quote .. "...prudent to wait for further buy signals (The already triggered MACD may be a tad to quick) to help confirm such as the DMI which it seems will trigger about the same time as the EMA100 and MA200 resistance breakouts..If that happens, both medium and long term investors will enter around the same time which in theory should provide larger than "normal" buying pressure......It did happen:).
UPDATE
Guidance announcement (https://www.nzx.com/companies/SUM/announcements/303208) this morning promised very good and continuing growth for the rest of 2017..Mr Market liked it and the price gapped up to $4.83 +18c from last nights close.
SUM has been a bear for 9 months and has been a teddybear so far (cute and cuddly) but like all bears their temperment are unpredictable....Without looking at TA one would've thought the 18c gap up this morning would have see the end of the bear...but this is not the case yet..the gap up did push many TA indicator signals into the marginal buy area and a one lonely charted break (the 4.77 resistance line)..but it just indicates how broken this SUM chart was until today...
What now..???
The gap up today hasgot close to resistance areas and has stalled..SUM still has a lot of work to do..There are conjunction resistances MA's 50 100 200 a neckline and a ~$5.00 resistance (not drawn on chart)..Conjunction areas are hard to break as they need a lot of buyer pressure (momentum)..If SUM does break though the conjunction area, the drop in resistance + that buyer pressure rally will propel the price quickly upwards (physics) as was the case back in late January...
However that gap up today mean't that many of us on the sidelines have missed out..and buying in after this gap up and the price being so close to the conjunction area may not be wise due to the increased risk (rule of thumb: - buy near supports, not near resistances)..Second thing to remember is SUM is still a bear (downtrend and price still below EMA200)
The chart below has a lot of information and is rather cluttered..due to lack of space I have left out..S&R (resistance) line ~$5.00 .. another falling wedge pattern which broke downwards (late May) this time..The falling wedge is mixed up with tilted asymmetrical shaped H&S type pattern both giving a TP of ~$4.25...
http://i458.photobucket.com/albums/qq306/Hoop_1/SUM%2028062017.png (http://s458.photobucket.com/user/Hoop_1/media/SUM%2028062017.png.html)
yeh Hoop
I definitely jumped early on the descending wedge but that was part of my TA view (as well as the harmonic patterns) that it could be ready for a sharp upward movement , which todays movement could be the start of , a promising sign.
Joshuatree
27-10-2017, 02:15 PM
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
4517
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
4518
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
4519
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
4520
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
Closest I'm going to get to KW , recycling her great T/A advice:D
Longhaul
18-12-2017, 05:36 PM
Does anyone have any experience tracking VWAP over time to assist with entry and exit points?
I look at it to judge momentum but have never seen it used as a distinct technical indicator which seems a bit of a shame. I use it alongside volume, MACD, RSI, DMI/ADX and moving averages.
Even though some sites provide VWAP for the current day, I can't find a site that has the historical information. So I need to remember to check and record it for stocks every day which just doesn't happen.
The other alternative I've considered is getting a script written to crawl ANZ securities (for example) and save the VWAP for each stock to a Google Sheet or something.
Appreciate anyone else's thoughts on this.
Does anyone have any experience tracking VWAP over time to assist with entry and exit points?
I look at it to judge momentum but have never seen it used as a distinct technical indicator which seems a bit of a shame. I use it alongside volume, MACD, RSI, DMI/ADX and moving averages.
Even though some sites provide VWAP for the current day, I can't find a site that has the historical information. So I need to remember to check and record it for stocks every day which just doesn't happen.
The other alternative I've considered is getting a script written to crawl ANZ securities (for example) and save the VWAP for each stock to a Google Sheet or something.
Appreciate anyone else's thoughts on this.
On reading your post my mind turns to the Money Flow Index indicator, which takes volume into account
Have a read about it here.
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:mone y_flow_index_mfi
Its not on many platforms (that I use) but Findata provide it
so for instance to compare the MFI with the RSI as an indicator on Spark I concocted this chart.
9345
Hope this is helpful.
Joshuatree
22-02-2018, 01:09 PM
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
4517
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
4518
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
4519
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
4520
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
Thanks again KW;)
MauroNZ
21-03-2018, 06:05 PM
I've been reading the whole post following the recommendation from Beagle, thanks mate.
As far as I understood KW has left the forum and being an old post I can't access to the image examples to learn as TA is just very theoretical to me and now I'm trying to practice the mentioned guided above.
In today's market or maybe recently is there any examples there to match KW's guide done by anyone on ST maybe?. Would be much appreciated.
Baa_Baa
21-03-2018, 06:58 PM
I've been reading the whole post following the recommendation from Beagle, thanks mate.
As far as I understood KW has left the forum and being an old post I can't access to the image examples to learn as TA is just very theoretical to me and now I'm trying to practice the mentioned guided above.
In today's market or maybe recently is there any examples there to match KW's guide done by anyone on ST maybe?. Would be much appreciated.
As KW said, it's very a very simple trading strategy. Just Google "trading moving averages" and browse the main articles, then extrapolate that to the mainstream moving averages that KW is talking about ... and you'll get the gist of it. To extend the learning, Google "momentum share trading" as well.
You'll need a basic chart tool, where you can choose various moving averages, and 'back test' what works for the shares you are interested in .. such as here: https://finance.yahoo.com
KW has explained the theory in its simplest form as buy shares that are going up, and sell shares that are going down. :cool:
MauroNZ
22-03-2018, 11:42 AM
As KW said, it's very a very simple trading strategy. Just Google "trading moving averages" and browse the main articles, then extrapolate that to the mainstream moving averages that KW is talking about ... and you'll get the gist of it. To extend the learning, Google "momentum share trading" as well.
You'll need a basic chart tool, where you can choose various moving averages, and 'back test' what works for the shares you are interested in .. such as here: https://finance.yahoo.com
Thanks mate. I just had a look at CEN chart on yahoo and according to KW criteria isn't giving a buy sign yet. Would you agree on that?.
Baa_Baa
23-03-2018, 06:33 PM
Thanks mate. I just had a look at CEN chart on yahoo and according to KW criteria isn't giving a buy sign yet. Would you agree on that?.
KW said "entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA"
So have these two simple triggers occurred for CEN? There's your answer.
KW said "entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA"
So have these two simple triggers occurred for CEN? There's your answer.
by my reckoning you'd have been in last May , and seriously starting to consider exiting now by that method. for little if any gain.
And in 2016 you'd have been right royally screwed using that trigger and exit strategy.
9585
Baa_Baa
24-03-2018, 12:00 PM
by my reckoning you'd have been in last May , and seriously starting to consider exiting now by that method. for little if any gain.
And in 2016 you'd have been right royally screwed using that trigger and exit strategy.
9585
In fairness to KW, have you applied her exit criteria, or just assumed the exit criteria is the reverse of the entry criteria?
In any event, the KW method I hoped MauroNZ would conclude (for CEN) can leave a lot of money on the table for sells and is quite late for buys, sometimes very late, even triggering in some cases when the SP has reentered a short/med term down trend.
There is no magic bullet trading methods that works for every share, it takes time to determine for any given share what combination of indicators which when triggered in sequence, gives a greater confidence to buy or sell.
Hoop posted some terrific material on this thread, protege of Phadreus. I enjoyed and now miss both of their insights, analysis and willingness to share.
Snoopy
29-03-2018, 07:48 PM
By my reckoning you'd have been in last May , and seriously starting to consider exiting now by that method. for little if any gain.
And in 2016 you'd have been right royally screwed using that trigger and exit strategy.
I find it amusing that some think they can apply a 'single share price trigger' figure as when they should buy and sell any particular share they choose, such as:
"entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA"
Not all shares behave in the same way.
Contact is a utility like share which bounces around in a relatively narrow price band. The best strategy is to buy near the bottom of the band and sell near the top (if you are a trader). If you wait for the uptrend to become established you will miss the low risk gains. Such a rule also ignores dividends which have traditionally provided some 80% of the gains on this share. Try using a trading rule that leaves out 80% of the relevant data points and see how you get on.
IMO trading Contact is a terrible idea because it is not volatile enough, while the juicy divdends reward buy and hold investors. Blindly following the trading rule for CEN as defined will likely lead to terrible results, far worse than buy and hold unless you are a broker who will be happy to pocket your commissions on the way.
SNOOPY
MauroNZ
26-04-2018, 10:19 AM
KW said "entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA"
So have these two simple triggers occurred for CEN? There's your answer.
Thanks I was trying to apply the principle and just chose a random share.
MauroNZ
26-04-2018, 10:21 AM
I find it amusing that some think they can apply a 'single share price trigger' figure as when they should buy and sell any particular share they choose, such as:
"entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA"
Not all shares behave in the same way.
Contact is a utility like share which bounces around in a relatively narrow price band. The best strategy is to buy near the bottom of the band and sell near the top (if you are a trader). If you wait for the uptrend to become established you will miss the low risk gains. Such a rule also ignores dividends which have traditionally provided some 80% of the gains on this share. Try using a trading rule that leaves out 80% of the relevant data points and see how you get on.
IMO trading Contact is a terrible idea because it is not volatile enough, while the juicy divdends reward buy and hold investors. Blindly following the trading rule for CEN as defined will likely lead to terrible results, far worse than buy and hold unless you are a broker who will be happy to pocket your commissions on the way.
SNOOPY
Thanks Snoopy (btw I pay a good attention to your posts) I was trying to practice the principle by understanding the charts with few different shares and at the time I posted I was just looking CEN. Not with the idea of trading it but with the idea to learn as I believe investing is always a learning.
Joshuatree
18-02-2019, 02:31 PM
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
4517
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
4518
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
4519
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
4520
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
Refreshing this every now and then, great place to start for newbies and a good basic reminder for me.
Joshuatree
26-11-2019, 01:40 PM
https://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by KW https://www.sharetrader.co.nz/images/buttons/viewpost-right.png (https://www.sharetrader.co.nz/showthread.php?p=406846#post406846)
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
Attachment 4517 (https://www.sharetrader.co.nz/attachment.php?attachmentid=4517)
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
Attachment 4518 (https://www.sharetrader.co.nz/attachment.php?attachmentid=4518)
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
Attachment 4519 (https://www.sharetrader.co.nz/attachment.php?attachmentid=4519)
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
Attachment 4520 (https://www.sharetrader.co.nz/attachment.php?attachmentid=4520)
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
Joshuatree
20-03-2020, 07:44 PM
Any stocks left not looking like a sell T/A wise?
https://www.sharetrader.co.nz/images...quote_icon.png (https://www.sharetrader.co.nz/images/misc/quote_icon.png) Originally Posted by KWhttps://www.sharetrader.co.nz/images...post-right.png (https://www.sharetrader.co.nz/images/buttons/viewpost-right.png)
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
Attachment 4517 (https://www.sharetrader.co.nz/attachment.php?attachmentid=4517)
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
Attachment 4518 (https://www.sharetrader.co.nz/attachment.php?attachmentid=4518)
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
Attachment 4519 (https://www.sharetrader.co.nz/attachment.php?attachmentid=4519)
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
Attachment 4520 (https://www.sharetrader.co.nz/attachment.php?attachmentid=4520)
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
pedro.nz
20-03-2020, 08:00 PM
Try applying the above rules to FPH :)
Is the low volume on this recovery typical ?
kiora
17-04-2020, 09:16 PM
Is the low volume on this recovery typical ?
Only when its not convincing
Only when its not convincing
And is it ?
kiora
17-04-2020, 09:26 PM
The low volume tends to indicate that its not convincing
https://marketrealist.com/2014/12/interpret-volume-technical-analysis/
Thanks, that's my understanding also but is it a true reflection of a weak recovery ?
kiora
17-04-2020, 10:42 PM
Thanks, that's my understanding also but is it a true reflection of a weak recovery ?
Share values yes,economy maybe
Joshuatree
11-02-2021, 03:42 PM
Refreshing KW's excellent basic T/A for dummies(including me:)
I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.
1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).
Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
4517
2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.
MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)
4518
Another great example is SIV - entry point is end of February ($5.90 - $6.28)
4519
3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).
ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
4520
I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.
Beagle
16-02-2021, 09:50 AM
An excellent post by the true legend KW who is sadly missed on here.
I use 30 day, (put on or take off a half sized position) and 100 day, (put on or take off the other half) moving averages as indicators to support my fundamental analysis.
If FA and TA both look good then far more often than not there is serious money to be made. On the other hand if FA is in question and TA looks terrible that's one's clue to stay out !
Buying stocks in a confirmed downtrend (see 6 month chart I posted for ATM this morning as one example), is an absolute mug's game especially when FA is so uncertain.
MauroNZ
18-02-2021, 03:52 PM
An excellent post by the true legend KW who is sadly missed on here.
I use 30 day, (put on or take off a half sized position) and 100 day, (put on or take off the other half) moving averages as indicators to support my fundamental analysis.
If FA and TA both look good then far more often than not there is serious money to be made. On the other hand if FA is in question and TA looks terrible that's one's clue to stay out !
Buying stocks in a confirmed downtrend (see 6 month chart I posted for ATM this morning as one example), is an absolute mug's game especially when FA is so uncertain.
Do you use only a 6 months period? I have had the chance to ask KW and she uses 1 year. So I would like to read your comments.
Beagle
19-02-2021, 02:22 PM
She has her way of doing things and does very well and is a lovely person too and anyone who is still in contact with her is blessed. I am always pleased to hear from her.
I follow my own nose for GARP stocks, (growth at a reasonable price) primarily following my own unique formula for finding growth and paying very little for it. No growth PE of 11 + 1 extra PE for each percent of growth I think a company can sustainable grow at in the next 7-10 years). My favorite hunting ground is to try and find free growth stocks or nearly free, (who doesn't like a free feed), like HLG where by my estimate they are trading on a forward PE of just 11-12 and you get the growth for free.
At my heart I'm a fundamental analysis person, (whereas I think KW is mainly a momentum investor). I tend to overlay TA on top of my FA rather than the other way round and use TA as either confirmation of my FA or a warning that something isn't. I find the 30 day and 100 day indicators most useful for me, doing the half size full size position thing as each indicator signals a change but others take a longer view with their TA and do just as well, like KW. She likes Chi Wawa's, I like Beagles and Terriers, both dog lovers but each to their own variety lol.
Whatever works for you mate, keep doing it :)
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