PPL Chart

[wbosher]

I've been keeping an eye on the PPL chart for the last few weeks. According to the GMMA, this is a strong trend with the long term averages consistant and spread out. The short term averages have dipped a little in the last few days but the underlying trend still seems strong. I couldn't include the GMMA because I don't have the software installed on this machine.

It looks like a pretty good stock to me based on this, and the trend line that I've plotted (I think correctly). I'm only concerned about two things:

1. Would it be right to get in now, or wait until the price dips a little closer to the trend line?
2. Missed the boat already? This trend has been going for a couple of months now,will/has it run out of steam?

Are there any other indicators or methods of telling if this still has a good probability of rising for a while yet?

I've also included the ADX but I'm not too sure how to interpret it.

[absolut-advance]

I've been keeping an eye on the PPL chart for the last few weeks. According to the GMMA, this is a strong trend with the long term averages consistant and spread out. The short term averages have dipped a little in the last few days but the underlying trend still seems strong. I couldn't include the GMMA because I don't have the software installed on this machine.

It looks like a pretty good stock to me based on this, and the trend line that I've plotted (I think correctly). I'm only concerned about two things:

1. Would it be right to get in now, or wait until the price dips a little closer to the trend line?
2. Missed the boat already? This trend has been going for a couple of months now,will/has it run out of steam?

Are there any other indicators or methods of telling if this still has a good probability of rising for a while yet?

I've also included the ADX but I'm not too sure how to interpret it.

$1.30 looks like a reasonable entry to me. ( Edit :see my other posts below as to why its not a buy and what I missed in this first post, text in bold)

Most trends run to a ADX of 40-45 before showing signs of trend exhaustion, PPL has pulled back to what I consider Technical Fair value for trending stocks, international markets as well as the ASX/NZX are at a critical level so take extreme caution, if you buy,place at stop loss below your buy in price to protect your capital.

A good trading Zone is between ADX 30-40

Buy near ADX 25- 30 - Trail stops more aggressively when the ADX exceeds 40, Most Trends will exhaust or pull back before 50 with only the very strongest getting above.

I like MMA's too as they give a Great visual of the Trend environment.

Nice Tight range on today's bar ...following 4 lower highs... Looks set to Swing Higher in the short term.(short term meaning next 2-3 days)

[wbosher]

Thanks for that. Just one question:


ADX between 30-35 show a strong trend is in place, Most trends run to a ADX of 40-45 before showing signs of trend exhaustion


A good trading Zone is between ADX 30-40


Buy near ADX 25- 30 - Trail stops more aggressively when the ASX exceeds 40, Most Trends will exhaust before 50 with only the very strongest getting above.

ADX is already around the 40 mark. So do you think I should wait for it to pull back to about 30?

[absolut-advance]

Thanks for that. Just one question:







ADX is already around the 40 mark. So do you think I should wait for it to pull back to about 30?

Yea I was using Yahoo data on IC charts which was out of date, When I clicked on your chart I noticed it.

The logical entry was on the break above $1.15 .....close price technical resistance which is now support.

Note chart is only up to the 12th May - Entry could have been Taken on the Break above the Bottom Blue Line ($1.15) it would have proved a safer entry.

On the Break above the bottom Blue Line your stop would have gone just below the bottom blue line , thus keeping your Risk low, Risk = the distance between your buy price and your Stop loss plus Slippage.

Blue Lines = Possible Support

New chart below

Looking Back a bit more Resistance is at $1.40 (I should have done this first instead of looking at a shorter timeframe)

maybe sit this one out on second thoughts.

Only a 10c Swing to $1.40 from $1.30 , Risk/Reward not worth it.

http://i41.photobucket.com/albums/e264/arranging/y_pplnz_price_daily10jun04_to_15jul.png

[wbosher]

Future Entries could be done better however, the logical entry was on the break above $1.15 .....close price technical resistance which is now support.

You're right about that, unfortunately my money was tied up somewhere else at the time.

I don't really know what my "investment style" is at the moment, I'm still trying to figure all this out. ;)

Basically, I think I just want to stay in until it looks like the trend is turning and hopefully get out with a profit. Not shooting for the stars here, a modest profit will do.

I was thinking that a good stop loss point would be a couple of cents below the $1.27 support level, what do you think?

[absolut-advance]

You're right about that, unfortunately my money was tied up somewhere else at the time.

I don't really know what my "investment style" is at the moment, I'm still trying to figure all this out. ;)

Basically, I think I just want to stay in until it looks like the trend is turning and hopefully get out with a profit. Not shooting for the stars here, a modest profit will do.

I was thinking that a good stop loss point would be a couple of cents below the $1.27 support level, what do you think?

I have edited the post above,

I was rushing my analysis...

Risk/Reward isn't worth the Trade imo, We need a good amount of space between Support and resistance to give us a decent Trade. PPL doesn't have that at the moment with only a 10c swing from $1.30 to $1.40.

If 10c is worth the risk to you then..

$1.26 would make a good stoploss point (just below $1.27) with a $1.39 Price Target if the trade was taken.

A Trade from $1.15 to $1.40 would have been a better Trade Risk Reward wise i.e a Trade from Major Support to Major Resistance.

Buy at Support - Sell at Resistance

[wbosher]

Sweet, I'll sit this one out. Things haven't been looking too flash all round over the last few days, may be worth keeping an eye on the big picture as well before jumping into anything just yet.

Thank for all your help. :D

By the way, how far back do you normally go to find valid support/resistance?

[absolut-advance]

Sweet, I'll sit this one out. Things haven't been looking too flash all round over the last few days, may be worth keeping an eye on the big picture as well before jumping into anything just yet.

Thank for all your help. :D

By the way, how far back do you normally go to find valid support/resistance?

Best to go back as far as possible and work your way down,

More Touches a Trend Line or Horizontal S&R line has more valid it becomes, also note that support and resistance reverses roles when they are broken, Support and resistance is best found using Close price line charts, but when the time frame your viewing gets down to less than a month.... Support and Resistance of the highs and lows on the bar charts are worth noting as well. Areas of past price congestion before breaking either up or down is what we are looking for.

[wbosher]

Cheers for that, this is an excellent forum for newbies!! :D

[Phaedrus]

Would it be right to get in now? Not in my opinion. PPL is in an obvious short-term downtrend. No-one knows how far this will run.


Have I missed the boat already? Perhaps. PPL has risen 66% in just 2 months. An uptrend that steep is unsustainable.


This trend has been going for a couple of months now,will/has it run out of steam? It is clearly starting to run out of steam. See how the steep OBV rise has now become much flatter.


Are there any other indicators or methods of telling if this still has a good probability of rising for a while yet? Yes, there are. What you are wanting is a leading indicator. Moving averages, trendlines, ADX etc are all trailing indicators. They are based on historical price data. The On Balance Volume indicator measures whether volume is flowing into or out of a stock and because changes in volume generally precede price changes, it tends to give signals earlier than price based trailing indicators. It gives us useful insight into the market sentiment lying beneath price action. You don't want to be buying stocks with a flat or falling OBV.

http://h1.ripway.com/78963/PPL514.gif

[wbosher]

Thanks for that Phaedrus. I'll start using the OBV in future it looks very useful.

While on the subject of using different indicators, a lot of people appear to be using a line chart to see support/resistance levels. I've heard the Point & Figure charts are also good for that, but don't see it mentioned here very often, if at all. Does anyone have any experience with P&F and is it any good for this purpose?? I've had a bit of a play with Bulls-Eye Broker and some of the results aren't too flash, may just be the way I'm using it (settings etc...).

Any advice??

[Phaedrus]

Point-and-Figure charts are a very old idea, developed well before the general use of PC's. They made it possible to follow a stock's price action using a completely manual technique that was less labour intensive than trying to maintain conventional charts. They are still good if you don't have any access to computer generated charts and there are still people that really like them. I am not one of those people, however. I guess it comes down to a matter of personal preference.

Re OBV. So long as you follow volume changes closely, the means that you use is of secondary importance. There is no need to fixate on the OBV the way I have! There are a lot of indicators that incorporate volume, the most commonly used probably being OBV, Price/Volume Trend and Accumulation/Distribution. Even a simple volume histogram gives a lot of insight - especially if the bars for Up days and Down days are in different colours.

Here is an updated PPL chart for you. The short-term downtrend continued on, and it has now broken below the trendline, giving a Sell signal. The OBV trendline was broken on 15/5/09, giving an earlier Sell signal. Down another 4 cents today - lucky you didn't buy eh?

http://h1.ripway.com/78963/PPL518.gif

[wbosher]

Down another 4 cents today - lucky you didn't buy eh?

Very!! :D:D:D

Having trouble finding anything at the moment that I do want to buy. With my latest fixation on support/resistance, nothing really seems to be providing much in the way of good potential profits (but plenty of risk). I missed all the huge rises over the last month or two, I was focusing too much on Guppy's "Trend Trading" method and missed out on the breakouts.

Guess I'll just keep saving my $$$ and keep looking, I'm sure an oppertunity will present itself eventually...no rush eh. :rolleyes:

[wbosher]

OK...I know it's pretty early in the morning and my brain hasn't completely kicked into top gear yet, but I could swear that there was a post here from absolut-advance! :confused::confused:

Did it vanish, or have the excesses from my youth come back to haunt me with hallucinations?? :eek: