Using TA to time entries and exits

[KW]

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)
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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.

[Snow Leopard]

Just a post to say how much I appreciate the time and effort you have put into sharing this with us, KW.

Hopefully I will make time tomorrow to add to the thread.

Best Wishes
Paper Tiger

[lou]

Great post KW.

What FA filters to do you use to narrow down the selection of companies that so you can then go apply TA to.

[Banksie]

Thanks for posting KW. I like this approach - use FA to find and TA to time.

[OldRider]

I would endorse the post of KW, I have used this for ages just with slightly different periods. It works for me as well

[Banksie]

I would endorse the post of KW, I have used this for ages just with slightly different periods. It works for me as well

OldRider - you mentioned you use different periods. How did you settle on the ones that you use? Is it based on gut-feel, knowledgeable advice, or researching historical trends?

[CJ]

KW - what would be your average hold period?

When you sell, do you sell down progressively (ie. Sell 25% when things start looking bad, then more/all once confirmed)

Do you consider yourself a trader or an investor (NZ tax test type definitions. Do you pay CGT or income tax on the gains in Australia - not exactly sure of their rules).

I have been planning on updating my buy and forget investing strategy.

[OldRider]

Banksie:
I guess you realize there is no right answer to the periods used, as KW mentions in his post each set has its own
advantages and shortcomings, I am quite sure his will work fine, they are a little more conservative than my 1-20-150.
I have used my figures for some years now and can't recall what made me settle on them. Probably trial and error
produced what suited my style.

Lou:
You are enquiring how to find a short FA list to apply TA to, I use a simple formula developed years ago, (pre computers)I think originally it might have had its roots with Buffet and Munger, I use it to monitor the entire ASX and NZX usually producing less than twenty
companies worthy of a closer look. Google "CGVI" comparative growth & value indicator, and see what you can find, if you have further questions ask them here

[Arbitrage]

Interesting KW. At the moment many shares are heading up and everyone is jumping in. The market will turn down again at some stage. You mentioned that TA is one tool and you present a good summary of your approaches. One problem for many share owners is "when to sell?" Your TA approach removes the emotional influence on the decision to sell. Do you have any other methods that you have tested to provide a check against the TA approach especially when selling?

[Banksie]

What charting software are your using KW?

[lou]

KW do you do your own research when looking for increasing earnings/dividends?

Do you look at forward EPS/DPS forecasts?

Do you have any portion of your portfolio set aside for speculative/growth stocks i.e won't make your EPS or DPS criteria but have excellent growth prospects?

[denshare]

HI Oldrider I am a new to the sharemarket and have not invested yet but am looking to. I found this site and read your post about CGVI and found more info on it but still need to see if I am on the right page so to speak. I found postings from 2003 on shareguru with the above formula and was needing more help with it.When I look at a company on the NZX securities page, Gross Dividend Yields is expressed as a percentage how can I get Dividend Per Share in Cents? and will the EPS, NTA and Share price shown be ok to work out the CGVI and do you still use 24 or greater as to which companies to look further into?

[lou]

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



Hey KW, do you ever buy into a stock base on your top up rules?

For example you like the looks of RYM and it has been in a strong up trend. Your not likely to see a golden cross signal as the 50MA is above the 200MA and will likely continue to remain there. Would you buy into RYM if it met your top up rules?

[blocker3]

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.

KW This is an excellent piece of information you have passed on .Thank You.

As I read your Post I recall what had happened to myself in the past .An example of this is with Greencross with my pre entered STOPLOSS. I knew that the instant share price crash happened for a reason but I could not pin it down.As a result my Stoploss triggered and I was wondering what the hell happen here and for what reason and so fast. ( ie 5 minutes)

Now after reading your post I can see why.

Snakes in the grass looking for a feast of cheap shares by suddenly dropping the share price of excellent shares like Greencross and triggering stoplosses.

Then instantly buying in after the crash.

You are the first person to state what I have suffered in the past with stoploss.

Cheers for that once again

[CC1]

Many thanks KW - very interesting thread

What settings would you favor for the MACD indicator?

cheers

[toast2success]

KW..this is superb. I have just started reading up on TA. Thanks for taking the time to post these details.

When you first started on the TA path how did you decide which tools from the TA toolkit would be the ones for you to use? and how have these changed over time ?

Any specific TA resources you'd advise a beginner to focus on . I have a 'Charting for Dummies' book at the moment .

[born2invest]

Now lets look at FXL: see anything similar? Do you think I am waiting around to see what the future holds? Not on your life - I sold last week, even if it goes on to recover nicely I still feel better taking my profits and sleeping well at night :-)
5239

When did you buy?

[notooshabby]

Hey KW, out of interest which charting program do you use? Cheers

[samdaman]

I'm new to investing and constantly looking for new checks I can add into my process for feeling comfortable about investing in a stock and KW this is some good analysis I can look into. Over the last couple of days I've been checking out historical changes of companies and etching along day by day trying to validate whether if I was holding at that current point whether I would sell or continue to hold based of this technical analysis and more often than not I'm finding it's returning positive results. I'm combining this with fundamental analysis as well so I'm not purely takeing random pot shots at tech companies and trying to ride a hype wave (all hypothetical and historical of course). In short I can definitely see these technicals making their way into my investing process

Cheers KW!
Sam :)

[Schrodinger]

Good stuff KW.

I use my own method but the things you have outlined are very informative.

[noodles]

no more spreading of good reputation left for me! thanks anyway

[Joshuatree]

Hi KW was just looking at your thread now. Its awesome , thanks:). Im pretty ignorant on charting so don't even know which line is a 50 or a 200 moving average.? Can you recco a website for beginners chart wise? have just emailed Direct brooking and looked at Etrade but am i right they don't offer charting? hell Z offers to check and pump up my tyres so whats up?

Also been thinking its about time i subscribed to a newsletter and was thinking of Motley Fool you don't rate it. I have noticed a lot of these paid subs places seem to put sells and buys up far too late( after they've sold/ bought? cheers JT

[Joshuatree]

Found FT.com (thanks lizard) for charting and basic learning. cheers DJV

[Joshuatree]

au.finance.yahoo.com also excellent for charting/etc.

[arc]

Have any of you folk heard of these guys .. http://rebellionresearch.com/main.html
I googled and found a few references and interviews with the company. Apparently using Artificial Intelligence (quant modelling) to drive stock selections. Would anyone care to comment on what /where they think this type of trading is going. Anyone here currently investigating this field?.

[arc]

I recommend to be careful.
If you choose to go ahead just dip your toe in.
What are your expectations?
Rebellion's artificial intelligence based multi-asset class strategy has managed money for ourselves and our clients since 2012
hmmm lol
AA prefers "real intelligence" rather than "artificial intelligence" .....but each to their own i guess.
AA

Absolut - Im not thinking of using their systems. They are USA based anyway. They are a young company, I wish them every success.
I think the concept is interesting, the tech is available to do it, there would need to be some mathematicians temporarily involved, some liberal picking of peoples brains to gather Investing concepts, a lot more reading of available literature to gather additional related scenarios and techniques etc. There's already numerous "Expert Systems" based on the collective knowledge of multiple appropriate people skilled in some target fields,, Drilling Rigs, Medical, Flight Dynamics etc. This slant is not one that has occurred to me before, a combo of data-mining and Machine Learning mixed in with good old fashioned Rule Based (Heuristics) programming.

[kiora]

Useful ?
S&P 500 Ichimoku Cloud

Ichimoku Cloud (or Ichimoku Kinko Hyo) is a technical anlysis method that combines leading and lagging indicators with traditional candlestick charts in order to provide a comprehensive trading system. Developed by Japanese journalist Goichi Hosoda in the 1960s, Ichimoku Kinko Hyo is translated as "one balance equilibrium chart", while the common name of Ichimoku Cloud refers to its appearance. Ichimoku can be displayed as a separate indicator in Minute, Hourly, Daily, Weekly or Monthly format.

[arc]

Useful ?
S&P 500 Ichimoku Cloud

Ichimoku Cloud (or Ichimoku Kinko Hyo) is a technical anlysis method that combines leading and lagging indicators with traditional candlestick charts in order to provide a comprehensive trading system. Developed by Japanese journalist Goichi Hosoda in the 1960s, Ichimoku Kinko Hyo is translated as "one balance equilibrium chart", while the common name of Ichimoku Cloud refers to its appearance. Ichimoku can be displayed as a separate indicator in Minute, Hourly, Daily, Weekly or Monthly format.

Thanks Kiora
Interesting. I havent seen that one before. Does anyone have a copy of the formula that drives it.

[kiora]

Ichimoku Cloud

S&P 500 Ichimoku Cloud

Ichimoku Cloud (or Ichimoku Kinko Hyo) is a technical anlysis method that combines leading and lagging indicators with traditional candlestick charts in order to provide a comprehensive trading system. Developed by Japanese journalist Goichi Hosoda in the 1960s, Ichimoku Kinko Hyo is translated as "one balance equilibrium chart", while the common name of Ichimoku Cloud refers to its appearance. Ichimoku can be displayed as a separate indicator in Minute, Hourly, Daily, Weekly or Monthly format.

Ichimoku Cloud Formula

Ichimoku Cloud consists of 5 lines plotted on the Candlestick chart:

Tenkan-Sen

Often referred as the Conversion Line, Tenkan-Sen is simply the mid-point of the latest 9 trading days/periods — the average of a 9-day High and 9-day Low on a daily chart.

Kijun-Sen

Kijun-Sen, or Base Line, is the mid-point of the latest 26 trading days/periods. The two lines (Tenkan-Sen and Kijun-Sen) are used in a similar fashion to fast and slow moving averages.

The "Cloud" itself consists of two leading moving averages:

Senkou Span A

Senkou Span A is the mid-point between the first two lines, Tenkan-Sen and Kijun-Sen, but plotted 26 days/periods ahead of the current period.

Senkou Span B

Senkou Span B is the mid-point between a 52-period High and a 52-period Low and is also plotted 26 days/periods in the future (ahead of the current day).

Last is the lagging indicator:

Chikou Span

Chikou Span is simply the Closing Price, but plotted 26 days/periods in the past.

Ichimoku Cloud Trading Signals

The Cloud: Finding the Trend

The trend is upward when price is above the Cloud.

The trend is downward when price is below the Cloud.

The trend is flat (undetermined) when price is in the Cloud.

The Cloud is green when Senkou Span A is above Span B. A predominantly green cloud indicates a strong up-trend (or weak down-trend), while a predominantly red cloud indicates a strong down-trend (or weak up-trend).

Trading in an Up-trend

Signals above a green Cloud are stronger than signals above a red Cloud.

Go long when Tenkan-Sen (blue) crosses above Kijun-Sen (red).

Go long when Price crosses above the Kijun-Sen (red) line.

Exit when Price crosses below Kijun-Sen (red).

Exit when Tenkan-Sen (blue) crosses below Kijun-Sen (red).

Trading in a Down-trend

Signals below a red Cloud are stronger than signals below a green Cloud.

Go short when Tenkan-Sen (blue) crosses below Kijun-Sen (red).

Go short when Price crosses below the Kijun-Sen (red) line.

Exit when Price crosses above Kijun-Sen (red).

Exit when Tenkan-Sen (blue) crosses above Kijun-Sen (red).

Example 1

The S&P 500 index is plotted on a weekly chart with Ichimoku Cloud.

S&P 500 Ichimoku Cloud

Price above the Cloud indicates an up-trend. The first buy signal is when the blue line (Tenkan-Sen) crosses above the red (Kijun-Sen), after the green Cloud indicates the trend is firmly established. The second long entry (if pyramiding) is when Price closes above the red (Kijun-Sen) line. Again, the green cloud indicates an established trend. A third entry signal is available when the blue line (Tenkan-Sen) again crosses above the red (Kijun-Sen). Exit if Price closes below the red line (Kijun-Sen) — or the blue line (Tenkan-Sen) crosses below the red.

[arc]

Thank you Kiora
I will have a play with this info and see what rolls out. It will take a couple of days as I aim to code it into a small program to test automating the process.

[catbert]

Why don't you post a link to the original site where you took all this information from?

It's all here: http://www.incrediblecharts.com/indicators/ichimoku-cloud.php

[peat]

Better yet, why don't you stick to the thread topic and show how using an Ichimoku Cloud would have signalled an entry or exit on a stock. This thread is about applying TA in real life not regurgitating its theory.

I have spent a lot of time looking at Ichi and have not found it useful as a trading tool.

[BIRMANBOY]

Sticking my non trading nose in (and knowing NOTHING about the company and just looking at the 10 year (not the one year) chart) I, as a long termer, would have held and be looking to buy more...but as a trader I suppose I could see the point in selling and looking to buy back in as it recovers... Is this your plan?
MTU had been flirting with the 200 day MA for the last six months, but the breach was never confirmed as the share price quickly bounced back up each time. However, after the third time it happened and the price did not go on to make a higher high, but once again fell below the 200 day MA and this time stayed there (and the RSI had never moved back into positive territory) , I decided enough was enough and MTU was sold on the 7th April for $5.83. Was that a good TA decision - you tell me :eek2:

5730

[lou]

Sticking my non trading nose in (and knowing NOTHING about the company and just looking at the 10 year (not the one year) chart) I, as a long termer, would have held and be looking to buy more...but as a trader I suppose I could see the point in selling and looking to buy back in as it recovers... Is this your plan?

Birmanboy, at what point would you be getting out this stock? It has dropped 22% from its peak. Would you be getting out if it droped 30%, 40%...?

[lou]

Sticking my non trading nose in (and knowing NOTHING about the company and just looking at the 10 year (not the one year) chart) I, as a long termer, would have held and be looking to buy more...but as a trader I suppose I could see the point in selling and looking to buy back in as it recovers... Is this your plan?

Birmanboy, at what point would you be getting out this stock? It has dropped 22% from its peak. Would you be getting out if it dropped 30%, 40%...?

[BIRMANBOY]

Ride em cowboy..... hypothetically speaking since I am not a trader. If you forced me to make a decision I would be looking at underlying company information, its place in the industry, overall market conditions etc. etc. Presumably as a trader I would have a set range to sell and a set range to buy. If one wants to be successful presumably it would make sense to have pre-established guidelines and stick to them. Discipline is important to my way of thinking. I imagine traders like to measure and evaluate their trading systems and if you don't follow the rules you cannot test the results. I cannot imagine a trader letting something drop that much but I suppose it depends on the previous trading patterns it could well be that some shares have greater volatility and one could set a wider range between events. As a holder I must confess to letting shares get into your 30% range but MOST of the time they have recovered and in the meantime I have been getting dividends. Obviously completely different when trading. I have recently started some trading and have had one success and one failure (so far) but have yet to develop any real rules of engagement .
Birmanboy, at what point would you be getting out this stock? It has dropped 22% from its peak. Would you be getting out if it droped 30%, 40%...?

[BIRMANBOY]

Ah ha I assumed you were trading it based on the thread. So if you owned it for 2 years buy price would have been approx. 3.30 and selling it at 5.83 is a very nice return just from growth alone. As I said previously, looking at the ten year chart shows a better picture but that's purely superficial and I know nothing on the companies prospects and current position. I can see your rationale if there are other more attractive prospects available. Not sure if I agree with your point that good companies never lose their mojo. Buying strong companies at the height of their strength can be limiting to the upside potential in comparison to a basically sound company that has lost its way temporarily. Tortoise and hare. However everybody works to their own systems and achieving that sort of return on a regular basis would make your system the envy of most people.
I am not a trader, this was not a trading stock (having owned the stock for two years). I am a long term investor in solid companies in strong uptrends, which MTU is not anymore. So while it goes back on the watchlist, it may be some time before it looks to recover the momentum it used to have - like FXL. In the meantime there are other opportunities where the risks are lower and the rewards are greater. I simply don't like sitting around waiting for stocks to recover their Mojo - a good stock never loses it in the first place. You only have X amount of $ to spend in the market, so your aim should be to have that $ invested in only the very best stocks you can find, not the stragglers.

[BIRMANBOY]

Whatever gets you up in the morning:). How does your system cope in a sustained down market...surely must be a lack of suitable options then? What/how do you change? I use elements of TA for buying and buying more but death is my exit strategy (based on premise of dividends for life). Of course this theory /strategy has no proof available since I have been in market relatively short period and haven't died recently so all a bit of work in progress.
The problem is that you don't know how long "temporarily" is. Could be years before it recovers, or it may never do so. One profit warning is usually followed by others. The risk of waiting it out can be lethal if the company continues to fail - see Forge as an example. I tend to bail on the first sign of bad news. When you have a lot of money at stake, capital protection outweighs everything else. That and I'd rather get 20% per annum growth consistently than 100% growth on occasion.

Its not as if there is ever a shortage of strong performing companies to choose from. And some growth companies may only achieve it for a few years before growth begins to stagnate and your future returns become limited. So you run with the good ones for so long as they are outperforming the rest of the market, and you move on from the "still good but not great" companies. That is in essence the value of TA and timing the stock/market - your money is always where it is working hardest, otherwise you are just a FA investor at the mercy of the market to recognise hidden value in a stock. Both approaches work - but I believe the FA/TA combo accelerates returns (and when applied to long term investments those returns are not eaten away by overtrading or commission costs, which is usually what kills pure TA driven trading returns).

[Beagle]

I would remain in high yield stocks (eg. REITs) for the dividends, but would exit all my growth stocks. I would be buying contrarian ETFs like QID and BEAR if they showed they were in a TA uptrend. Otherwise I would be in cash waiting for the bottom to be found.

I like your style. Watching CNBC this morning they put up a chart of the Nasdaq and it showed a very clear head and shoulders pattern with all the risk too drop off from the right shoulder. With the Russian / Ukranian situation potentially affecting European stocks and having world-wide trading implications, (one of their expert analysts after just coming back from the Ukaraine thought that it seems almost inevitable that Russia will invade eastern Ukaraine), its hard to see very high PE and no PE stocks, (i.e.like those trading on nothing but thin air and promises and future sales growth with no demonstatable proven profit record) not getting their wings clipped as a rotation towards value stocks and safe havens gathers momentum. Well run, moderatly geared high dividend REIT's look like a good place to hide, as is good old fashioned cash or short term high quality bonds.

[koven]

Hi KW. My first post - very interesting thread. If you don't mind me asking, what sort of returns have you averaged using your current approach?

[Beagle]

Even better, the listed trusts usually also suffer a P/E contraction along with the general market, pushing their yields up. It is often a good chance to buy them cheap, in order to get more cashflow in the future. I think most of my REITs are currently delivering 14-28% yields now on my buy price a few years ago. Keep reinvesting the cash, and the magic of compounding does the rest.

Yes we've seen that with Goodman property trust which for no reason has been beaten back to trade slightly under NTA and showed a fully tax paid dividend yield of 6.5% based on my recent extry price. They're only distributing about 80% of their profit so the gross dividend yield for those on a 33% tax rate here at 9.7% understates their true earnings. Developments of their land bank are progressing well.

Would you please be so kind as to share your two most preferred Australian REIT's together with their current yeilds based on current pricing, that would be most appreciated.

[koven]

Current long term income and growth portfolio (21 stocks) is up 125% with shares purchased between 2011 and 2013. This doesnt include the stocks I've sold this year though, as I havent reinvested the profits yet. My smaller more speculative portfolio is up over 300% with shares purchased 2013-2014.

Very impressive, thanks for answering.

Are all of those in your growth portfolio from NZX and ASX?

[Beagle]

Thanks I'll look into those.

[muss1]

KW, great thread. I've only just discovered it. I am an FA investor but try to use some sort of TA to help my timing, although haven't got to the point where I have a system. I rely more on my ability to know whether something is undervalued or overvalued and position myself accordingly.


Curious to know whether you use EMA or SMA and why? I can see the merits in both, but am leaning towards EMA especially when considering longer time frames

[Longhaul]

KW, very interested to know how you set trailing stops?

[Joshuatree]

Hi KW Steel and Tube on NZX looks like a good example. I hold a few and see it is approaching the 200dma (on NZX website); would your T/A look at selling soon? thanks for your free sharing btw. JT

[arc]

As a newbie I have been looking at different websites such as Google finance and ANZ (for broking). I have just looked at Yahoo finance and noticed that yahoo seems to have /report data volumes that are not even appearing on google or anz...!

I see a 1.5Mill and later a 2.2Mill trade for NZX:AIA and it does not even appear on the other two sites..??

They are not reported under the Market Depth of anz...
Talk about serious holes in the data,

[Snow Leopard]

As a newbie I have been looking at different websites such as Google finance and ANZ (for broking). I have just looked at Yahoo finance and noticed that yahoo seems to have /report data volumes that are not even appearing on google or anz...!

I see a 1.5Mill and later a 2.2Mill trade for NZX:AIA and it does not even appear on the other two sites..??

They are not reported under the Market Depth of anz...
Talk about serious holes in the data,

Well, I just had a quick look at google, yahoo, stocknessmonster and ASB Securities and they are all reporting the same volume, (they all get their data from the NZX).

So I think you may need to have another look.

Best Wishes
Paper Tiger

[arc]

Missing data on the volume trace, below graph.

http://infinitas.co/r.d.d/img.lib/google-aia.jpg

http://infinitas.co/r.d.d/img.lib/yahoo-aia.jpg

[noodles]

Missing data on the volume trace, below graph.

http://infinitas.co/r.d.d/img.lib/google-aia.png

http://infinitas.co/r.d.d/img.lib/yahoo-aia.png

I worked out what your issue is.

You are using linux;)

[Joshuatree]

Only if it breaks below the 200 day EMA and stays there (rather than rebounding back up). A look at the chart shows the price has not tripped the 200 day EMA yet, and has rebounded back above its 50 day EMA which is a good sign, with both positive MACD and RSI - which all suggests that it might be ready to resume its uptrend. However, $3.20 looks to be quite firm resistance, so the stock may remain rangebound. Trajectory will ultimately depend on company news - as market sentiment not in a position to drive the P/E expansion much further.

Excellent ;)thanks KW its just done it again passed up thru the 200 and hit the 50.A ragged saw tooth rangebound chart alright. cheers

[Snow Leopard]

Missing data on the volume trace, below graph.

So it looks suspiciously like Google only show on market traded volume and that Yahoo volume data is totally screwed (pardon my French).
Better ask them what they actual represent on their charts.

And why are we discussing this on the entry and exit thread, anyway?

Best Wishes
Paper Tiger

[arc]

ooops ... sorry folks I didnt realise the images would be so BIG.
Does this site allow us to modify tags to manage image size ,just like in html "<img height=xx width=yy"

#edit; adjusted/cropped the images

Noodles... Linux rulz.

Paper Tiger... Im just trying to clarify for myself the charting/ fundamentals issues with trading. If I cant get an accurate overview of the situation then I am well and truely behind the 8 ball so to speak . I realise Google/Yahoo etc are a "Free Service" but quality standards still should be maintained.

The deeper I look the more areas of concern there are to look at. Dark pools, broker alliances, HFT traders and access to "Personal data". where does it end?


looking like time to play this like it really is.. a casino.

[Mista_Trix]

Hey KW, thanks heaps for this thread its been incredibly informative and has helped me write, and stick to, some rules for myself ... as painful as they have been to impliment. Why selling is so hard even when all the evidence points to getting out I just don't know.

Anyhoo.

I was just wondering what your success rate looks like using the EMA50 crossing EMA200 (on the up-trend) as opposed to other indicators. I imagine by this point they've established a pretty solid trend. So I'm wondering, although you've missed the initial gains, you've likely caught stability at this point (which is more what I (like yourself) would be more comfortable riding), so how many under your system buck the trend and turn around again (downwards)?

Thanks :)

[Aaron]

This faulty and missing data feeds has been a long going problem with Yahoo ...many years now.

Yahoo is near impossible to contact if not impossible I've and some other STers have tried to contact them and eventually given up trying as there are simply no communication links to a human being...
...and Yahoo's Robots don't acknowledge this problem.

It's possible Yahoo after all these years may still be unaware of their faulty NZ data service.

We've communicated with NZX and they said it is not their fault...

When charting NZ stocks AVOID using YAHOO!!!...and AVOID relying on free charting programs using Yahoo NZ data feeds(e.g Incredible Charts) without using another
non yahoo feed charting program as confirmation.

In an unrelated issue with Telecom/Yahoo I found Yahoo to be the most unhelpful organisation I have ever dealt with(in recent memory). Pack of arseholes was my feeling after three emails from three different people with no way to contact them (no personal emails) no helpful information provided to my problem. Spark needs to ditch these turkeys asap and find someone else.
Disclaimer my lack of understanding of the web and frustration may have already soured the situation but I found Yahoo to be most unhelpful.

[Mista_Trix]

To follow on from that.

Hoop, which charting software do you use?

[skid]

The anz securities charts are 30day and 100day ma --Is there a way to adjust them to 50 ma and 200ma or is it better to go to another charting service

[winner69]

The anz securities charts are 30day and 100day ma --Is there a way to adjust them to 50 ma and 200ma or is it better to go to another charting service

If you go to Charts and then Super Charts you can change the intervals

Bad news though. Both 50 and 200 not a selection. Need 30 or 90 and 180 as closest selections

Funny on the interactive charts on nzx site you can choose 50 and 200 ....bad not at the same time. They trying to protect you from Death Crosses

Stockness will give you 60 and 180 on same chart

[skid]

Yes ,I saw that.
Its interesting that most of the chart savy investors prefer the 50-200 and anz(direct broking)dont even give the choice:confused:

[Mista_Trix]

How broken is Yahoo finance data for long trends?
Its what I've been using as it seems to have most straightforward tools to chuck over the top of the data, without paying for a service.

[Yoda]

Hi kw
do you use adjusted, or unadjusted charts. The ASB has 2 choices and makes a small difference, depending on the dividend.
this thread has been very helpful to me and i am beginning to make adjustments accordingly, after not selling soon enough for a heap of shares. CNU NZ to be doing the right thing, as does MFT. im thinking FPH are a bit high on the PE RATIO. ....?

[winner69]

NG its a working paper series....used by the faultily for their teaching and research..Many large American Universities do this and often co-authored so other Universities share the same info...For the record Harvard does this too....The State University of New York speaks for itself New Guy Its huge and has 64 satellite campuses and has a student role of over 450,000 ...Its business school is in Albany, It's Graduates were ranked No1 in 2012 so they are snapped up by businesses as soon as they graduate..yes their grads were ranked ahead of all others in USA that year, including Harvard....from Google there seems to be about 1000 undergrads doing Business degree Accounting & Marketing alone...

New Guy ..I've done some of your homework for you and I have no time left on this subject..If you haven't heard of these guys just Google the Authors.. google the list of papers they have written... you will find their work are published in various well known Financial Journals..and for my sanity ...just download the damn thing and read it.:)

This paper appeared in Research in Finance publication last year. Seems to be highly thought of academic publication.

[Joshuatree]

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.

Was looking for this excellent charting advice from KW so putting it up there again. One question am i right saying the 50/60DMA can be below the 200DMA but still in an uptrend sometimes or am i being a bit thick?

[samoooli]

Hi Guys,

Found this article a good read to understand how the smart money tests supply. I think it fits in nicely with the volume and price indicators discussed.

http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:wyckoff_m arket_analy

S

[skid]

Its frustrating how direct broking charts dont allow you to use the 50-200MA (closest I guess would be 30-180)and their normal default chart is 30-100 which when compared to the 30-180 (in the case of PEB) of course looks totally different--In the default 30-100 the 30day ma has crossed above the 100day MA for some time (over a month) and with the 30-180 it is still well below.

[samoooli]

KW (or anyone else) - Would you be able to comment on how you go about buying into a share already in an uptrend?

For instance I am looking to get involved in AJX - A few TA points for starters:

- A pullback to the last support? (31c~) or to the 50MA - I dont know if or when this will happen in the short term (think LNG march-mid april 2013)
- RSI moves back to a median position (45-60)?

Alternatively, do you take these types of scenarios more on a case by case basis ie a stock has gone on a tear in the last 30 days , or a disruptive technology emerges and it is wiser to base entry on the confirmation of anticipated FA event(s) (such as a new contract coming to fruition, legislation passing to embrace said technology).

OR

- do you think Im off my head and getting to wound up in the hype and recent surge in the share price..

Appreciate any insight or constructive criticism.

S (a newbie)

[Hoop]

I don't exactly know where to post this chart...As Fibonacci is a TA discipline (of sorts) this thread is probably the best place..
Unfortunately I have only discovered the WHS share price correlation with Fibonacci discipline,,,,,,,,,,,,,,,

rest of post deleted

[Mista_Trix]

Hey guys. I've been using the 50 EMA crossing through the 200 EMA lately as an entry point, which has served me really well on many stocks over the past year or so.

However there are some where I clearly need to combine other indicators, examples of these are EBO, TME and DIL. I got whipsawed in and out of EBO at the begining as its moved sideways for quite some time, and although I didn't end up going in to TME (the p/e put me off - slowing growth company, non core acquisitions and high p/e), that also turned back below the 200 EMA. One more is DIL - crossed above, then below, then above again - I went in, got out, then went back in... and stayed in.


I'm just wondering what kind of indicators you would combine on top of this to help identify (earlier) the stocks that are not at a point of correction and are instead about to track sideways for a while, giving false indicators as they do. I've looked at PSAR but again, can give false indicators.

Any help appreciated, and cheers for the commentary - always a good read :)

[Snow Leopard]

You do not seem to be getting much traction on this one MT (no relation).

To clarify here is a pretty picture for DIL that covers the period in Oct-14 when the 50day and 200 day EMA's were intertwining with each other:
7139
Is this what you were referring to, with respect to your buy, sell & buy again?

Best Wishes
Paper Tiger

[Snow Leopard]

...I dont see the EMA's crossing several times in my chart (?) - ...

I can see convergence between your EMA200 and mine as time progresses:

So as a matter of interest KW, if with whatever you use to draw those graphs -
if you choose a 2 year width (2013-2015), is the EMA200 for the second year (2014-2015) the same as the EMA200 when you choose a one year period (2014-2015).

Best Wishes
Paper Tiger

[Snow Leopard]

DIL BigCharts 1 year:

7143

DIL BigCharts 2 year compare right hand half with above:

7144

So BigCharts EMA's are not reliable (being polite)

Best Wishes
Paper Tiger

[Baa_Baa]

I wouldn't use free online charts for any serious TA analysis, let alone decisions. I use Incredible Charts, for daily, weekly etc charts, it is fully featured, free with free NZX data from yahoo. Easy to use with just a small investment of time to learn. http://www.incrediblecharts.com/ Highly recommended.

BAA

[Baa_Baa]

ASB's whole trading platform is primitive, just an online fax machine for placing orders with their brokers, some very basic data tables, and agree ... the charts are awful. I think I read here on ST that someone suggested ASB might switch to the CommSec platform, which is a lot better, but don't expect even that to be a TA tool. No point calling ASB and asking though, they have 'fob off' down to a fine art.


Yahoo agrees with you. However, even if not perfect bigcharts is still better than the rubbish that passes for charts in ASB Securities. Its as though ASB think all their clients are stupid, so why bother giving them any useful tools.
7147

[Hoop]

Personally - I think that it is posts like this that give TA a bad name :p.

Give a TAer enough data points and their hindsight becomes brilliant :ohmy:.

The rest of us wrote SKT off last September (but forgot to mention it anywhere :t_down:)

Briefly glanced at it in November :bored:,

And have ignored it since :sleep:.

At least you have used a log price axis :t_up:

Best Wishes
Paper Tiger

Disc Apparently, if I put enough blue smiles in the post it makes it OK
:D :D:D:D :D :D:D:D :D

I've had enough of this crap ...I'm gone.
my posts will start to be deleted as of now
I'll leave you all in the "safe" hands of Paper Tiger ...the expert chartist with his fanastic charts and who knows it all....

[whirly]

No don't do that Hoop. You're one of the most valuable posters on ST.

Put him on ignore if you must but I'm sure I'm not alone in appreciating your posts.

I understand your frustration though, I myself don't post my charts because I still feel like I got my training wheels on after 7 years and I'm not sure I want to have to defend every call I make. There aren't really many chartists on ST though and I like looking at what others are up to and then comparing with my own efforts.

[Entrep]

Hoop would rather you continued and put him on ignore too

[Joshuatree]

Hear Hear!!!

[Jay]

I second that

[Toulouse - Luzern]

"No don't do that Hoop.
You're one of the most valuable posters on ST.
... ...
There aren't really many chartists on ST though and I like looking at what others are up to and then comparing with my own efforts.

Hi Hoop,

Please keep posting.

Totally agree with Whirly and KW.
Your posts and TA analysis are valuable for me.

Also enjoy PT posts over the years and especially PT effort for many years on the NZX contest.

Personally like TA and momentum for timing entries and exits and over the years you may understand I have read much negative comment on TA.

There are lots of subjects with as many viewpoints as people in the room/forum etc.

Lots to learn from others views.

All good.

And finally KW your posts are excellent and educational, I for one really appreciate them.

Thanks and regards

[pedro.nz]

I recently decided to have a look at every stock on the ASX to try and come up with a SHORT list of "Long Term Up-trending" stocks that have generally been up-trending since 2012. I realize this is a rather subjective sort of thing but the idea was to get a small list of stocks that I could keep a close eye on for researching etc rather than trying to cover the whole field each time.

Came up with this list...
AJA, ALL, APA, CAJ, CBA, CIN, CTD, DMP, HHV, GHC, LEP, LLC, MFF, MFG, MGR, MQG, NHF, QUB, RFG, RHC, SHL, SRV, SRX, SYD, TCL, TLS, TNE, TNE, TRG, VTS, WHF and several iShare ETF's eg IVV

7169

I know there are others that would also qualify but as I say it is a subjective thing and the above were found just by a quick look at each chart.
Next step is to check these stocks to see what signals would best suit me for entry and exiting such stocks.

The above chart is for RHC which co-incidentally is my biggest holding - depicts 3 moving averages (50, 100 & 200) none of which have crossed since March 2012. At that time it was approximately $19 - now close to $70

As an aside, although not in the above list, currently interested in HSO as I like Health orientated shares :cool:

[Snow Leopard]

I've had enough of this crap ...I'm gone.
my posts will start to be deleted as of now
I'll leave you all in the "safe" hands of Paper Tiger ...the expert chartist with his fanastic charts and who knows it all....

I wish to apologise unreservedly to Hoop.

I am sorry that I have offended you and will delete the post that caused you such distress.

I would also ask you to continue posting and promise not to be so critical again.

Best Wishes
Paper Tiger

[Jay]

Good on you PT

Though I thought that your post (original - not the one above) was a bit tongue in cheek - maybe that was just me

[BIRMANBOY]

Human nature being what it is.....its always hard to be criticized and particularly when one puts so much time and energy into the product being criticized. Hoop has my admiration , for what's it worth, and anyone putting in the work, study and effort that he apparently does has to be respected for the professionalism in which he pursues his work. I cannot see the offending post or maybe its beyond my knowledge base but in any case PT has offered a full apology and seems contrite so it would be nice for Hoop to reconsider and re-appear. Otherwise the avatar descriptions will have to be added to as ''bring back W69, Hoop etc.etc. etc." I don't follow the intricacies of TA so cannot comment on the validity or rightness of either of the posts , but I do know that investing and share trading is a big and strange universe and all views are valid to at least one person. Very few posters posted charts like Hoop and this forum would be a lot poorer without his views. In the weeks and days after being criticized clarity resumes and the old saying is "you cant please everyone all the time". However every now and then we can all learn something from criticism.. and when all is said and done you can always come back with my favourite line from Father Ted. "Fek off". All in good fun of course.

[Joshuatree]

Absoulutely Fek Off agree. Hoop I'm prepared to send you some Vitamin D and a Swedish Massage Matron with birch twigs to thicken your skin;). Life is too short to react to; but long and satisfying if one responds to it........

[gv1]

Love you Hoop..your work. Keep it up Man!

[hoyinma]

Hi Hoop
I also a rare poster and a frequent lurker.
I really appreciate your work and charts on this forum.
Please do stay around and post your lovely charts.

[percy]

I dont use the EMA cross, but buy when the price crosses above the 200 EMA and sell when it crosses below. So in DIL's case I would also have been in, out and in again (and still in). I dont see the EMA's crossing several times in my chart (?) - but it would still have been a risk management decision to exit or stay in during the October dip. One thing i am mindful of is that often shares coming out of long downtrends don't just go straight back up, they often rise and then fall back to test support, before rising again. Othertimes the price movement is nothing more than a Fakeout. You have to make the decision whether you are going to have a bit of tolerance with volatility while the uptrend plays out, or whether you play it safe and exit so as to preserve your capital. I usually play it safe, and am okay with several failed entries/exits before the share settles in for the long haul. In the DIL case you would have bought at $4.60, sold at $4.50 and bought back in at $4.60 - so the price of your risk management strategy was 10c a share. With EBO I wouldnt have been in at all (despite Percy's love for this stock LOL) - it has a long history of being rangebound and therefore you know before hand that you are going to get a lot of confusing TA signals. Try to stick to stocks with a history of long uptrends. There is no magic in TA - you will never get guaranteed results, all it does is shift the probabilities of success in your favour and keep you out of crappy stocks.

7140

EBO 2 year chart - way too hard to figure this one out!

7141

EBO.I think you are looking at too short a time frame,which is not giving you a full clear picture.
I have not been able to find the 23 year chart that is clear in my mind as a happy holder,however the 15 year chart is not a bad place to start.The 495 day moving average shows there would have been very little gained by selling when the share price has gone under it,but an awful lot would have been gained by buying when the share price has moved up through it. lol.

[percy]

Lo and behold..!!!!!!
Just when one could be forgiven for thinking EBO was rangebond,EBO springs back into life, and confirms the very long term upward share price trajectory is in tact,by setting another all time high.NB just gone ex dividend too.!!!!! lol...

[Joshuatree]

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.

With the asx looking bait dicey i went looking for this excellent advice from KW. Time to go thru all my stocks again and check the charts.

[Yoda]

Im trying to understand post 110 KW .." .I dont use the EMA cross, but buy when the price crosses above the 200 EMA and sell when it crosses below. .."..with the very first post where you say you buy when the 50 crosses the 200 as well ?

Have you changed your strategy a little ? Or am i miss-understanding something
Cheers

[Yoda]

Thanks for the excellent reply and advice on the current market. I have noticed quite a few of my stocks have stalled over the last 3-4 months .HNZ MFT, AIR, PGW, RHC IFT. all a bit slower than i expected, but above the water line, RBD doing well for now but watching for a slow down.
Maybe KMD is one of your yappy terriers , but tempted... But probably too soon, and as you say, there is usually a good reason.
MFT got me worried there, so sold out,and just bought back.
i love this site
thanks for your wisdom

[toast2success]

where would be a starting place fro someone new to TA to learn more (any recommended books on TA ?) / start practicing with some data ?

[Hoop]

Meridian broke out of its downtrend on Friday...it also broke out of its symmetrical triangle pattern, however it still has a bit of work to do to confirm that it has bottomed out...Friday's rise seems to be the result of a few buyers preempting Mondays Tiwai Point decision...

Is it a TA buy?....sort of... short term (more risk) yes.. medium term (lesser risk) not yet...MEL chart is yet to look good TA-wise...until one draws in it's pattern behaviour then sees that some magical stuff has been happening...

If anyone is writing a book about Triangle chart patterns and need a diagram then look no further than MEL's daily chart.
It's no secret that extended old triangle lines make good S&R lines, however there's little to no mention of them outside textbooks less alone seeing an example of one.
I've been drawing charts for many years, and Friday's MEL's chart blew me away..

Triangle patterns patterns form when large investors buy or sell at a predetermined price and dictate the market..such as when MEL started to turn down in price around March this year, there were some large buyers willing to mop up the "cheap" shares at $2.35 and when these buyers left the market MEL shares quickly fell out of its descending triangle pattern..
Symmetrical Triangle patterns see two equally opposing camps in play, the investors thinking its going to go up buying in at the dips and the other group who think its going to go down selling out when the share rises..

So where too from here?....It seems from the charted history that MEL price is dictated by Triangle extensions so the $2.28 and $2.35 would seemingly also be points of resistance and concerns for the chartist investor..If MEL can jump these hurdles then the share price should quickly increase....The chances that MEL can do this is better than 50/50 (Bulkowski) as it has already broken up out of the symmetrical triangle pattern which could be inside a possible still forming bullish ascending triangle pattern...

This lovely chart below is a rare well behaved beautiful beast...A chartists dream.

http://i458.photobucket.com/albums/qq306/Hoop_1/MEL31072015.png (http://s458.photobucket.com/user/Hoop_1/media/MEL31072015.png.html)

[Snoopy]

If you had bought $10,000 worth of FET shares 10 years ago you would have had 6,993 shares (@$1.43) which would be worth $14,545 today (@$2.08). Some might say thats not a bad return - 45% over 10 years. But over that time period you would have had to watch your investment drop to $0.14 - your $10,000 would have been worth $979 at the bottom of the bear market! How well would you have been sleeping then? You would not have gotten back to even until March 2013 - thats 7.5 years before you start to make a profit on your original investment.

However, if you had utilised the most basic of TA exit signals (in this case the 50 and 200 week moving average) you would have sold your shares in December 2007 (breach of the 200 MA) for $1.60 netting you $11,188. You then would have sat out the market drop until September 09, when using your $11k you would have bought back in at $0.38 (price above the 50 MA). This would have given you 29,444 shares which would be worth $61,243 today. Or a 610% return on your money.

45% or 610%? Your choice. Don't get trapped in a bear market. And if you have sold out, don't forget to buy back in once the share price recovers. You don't need to pick absolute tops or bottoms - you just need to be on the right side of the trend.

FYI - FET is an AREIT, a stable dividend paying stock.

I don't want to question KW 's post. KW has been very successful in the Oz market, and when reading a KW post you can be sure that the content is a collection of diligence and accuracy. However, the last emboldened bit had me asking the question:

"How did a 'stable dividend paying stock', plunge over 90% in a single dive?"

The 6th November 2008 ASX release provides the answer.

--------

ASX Announcement
6 November 2008
MARKET UPDATE – AUSTRALIAN EDUCATION TRUST
Australian Education Trust (ASX:AEU) announces a market update following today’s announcement that ABC Learning Centres Limited (“ABC”) has been placed into Voluntary Administration and that ABC’s Banking Syndicate has appointed a Receiver.

<snip>
The Australian Education Trust is a Listed Property Trust that independently invests to the benefit of its unitholders in childcare and other assets. As at 30 June 2008, it owned 437 childcare centre properties across Australia and New Zealand of which approximately 95% are leased on the basis of long term triple net leases to ABC.

-----------

So this stable dividend paying stock had 95% of their assets leased to one company that went bust? I can now see why Mr Market would have reacted the way he did, driving the price down to under 15c. This "95% in one basket" raises a big red flag for me, not only in hindsight. Why when seeking a secure steady income would you invest in a company that was 95% beholden to the fortunes of another company, like the highly leveraged and aggressively acquisitive ABC learning? Yes this was a high dividend paying stock. But the potential instability was there for all to see. So I would take issue with that one word 'stable', in KW's description of FET.

As I have previously said I have no issue with the numbers that KW presents. But why this focus on that share price ten years ago? Sure its a valid example. But what about the 'buy and hold' investor that bought in nine years ago, eight years ago, seven years ago, six years ago? There is nothing particular about this 10 year old start point except that it makes the trader look good, with hindsight, against the particular buy and hold investor that bought on that date. What about all those other buy and hold investors that KW didn't mention that are rather better off in relative terms than the unfortunate sod that KW highlighted? The KW post is an example of 'selection bias'. The post is perfectly correct. But it doesn't tell the full story.

SNOOPY

[percy]

Lo and behold..!!!!!!
Just when one could be forgiven for thinking EBO was rangebond,EBO springs back into life, and confirms the very long term upward share price trajectory is in tact,by setting another all time high.NB just gone ex dividend too.!!!!! lol...

Above posted 15-03-2015.
Right on the money!
The long term upward share price trajectory remains intact.!!
Another all time high.!!
When you invest in quality companies you achieve quality results.
Buy the best, and you get the best.!

[blu3]

I just went through this thread and would like to express my gratitude for sharing all these valuable insights so far—this is my first introduction to TA (Timing Analysis) and it already helped me to see things under another angle. While going through all my stocks I noticed that, if I had applied these recommendations, I would have done pretty well instead of being deep in the red and not knowing what to do next. In other words, many thanks KW! I only wished that I'd read it 2 years ago already.


While I'm here, I do have a couple of questions if that's ok?

#1
Do you usually sell a stock at once or only a part of it? Or do you adapt your strategy according to the TA indications?


#2

Favourite tools are moving averages, volume, support and resistance levels, 24/56/18 MACD.

In that other thread you were referring to a MACD of 24/56/18 when you were mentioning using the common default values (12, 26, 9) on this current thread—any reason for this change? Does it has anything to do with adopting a more conservative approach now that the bull seems to be over?


#3

FA rules are equally simple - 3 years increasing earnings per share (must be profitable!), 3 years increasing dividends, double digit returns on equity and capital (or 3 years of increasing returns, which looks like getting them to double digits), and a P/E below 15 (preferably, but this is not a hard rule). Sometimes I throw a wild card in there, but the company must still meet at least some of those requirements - being profitable is an absolute rule.

Is it really all you're looking for FA-wise when buying a stock? Also, do you use a specific stock screener to find stocks matching these parameters or do you perform the search manually?


Regarding the convergence of the EMAs on the DIL chart, ft.com (http://markets.ft.com/research/Markets/InteractiveChart) seems to provide more accurate results—furthermore it's slightly more user-friendly, thanks to Joshuatree for mentioning it!


Thanks!


PS: it's a shame that most attachement pictures are gone or are much too small to be seen—it makes it difficult to see some pattern that you were referring to (I am sometimes unable to spot them myself on the charts).

[Snoopy]

First, 10 years is the period of my charting software. No other reason. No selection bias, cherry picking of periods, or any other conspiracy. All it needed to do was highlight the Before and After of a Bear Market.


Choosing one comparative period of any specific length will introduce a selection bias into any comparison. This is irrespective of whether you consciously chose 10 years (say), or whether the software you are working with had 10 years of data so you just used that (IOW it was an unconscious choice). There is nothing wrong with choosing 10 years as the starting point in one data series as a comparison. But 10 years is no more 'correct' that choosing 5 years or 50 years. Such alternative 'long term' comparisons would be equally valid.

The point you make that if you sold before a big dip and reinvested that money as the same share climbed out of the dunny is still valid in a mathematical sense. But I can't see a compelling reason our 'long term' fundamentalist investor would have bought FET ten years ago in the first place. Yes it paid a good steady dividend. But the fact that 95% of its lease agreements had the same tenant on the rental agreement would have raised eyebrows for our hypothetical long term 'buy and hold' investor I would have thought.



Secondly, your comments on FET affirms my entire point - that it is better to listen to the market when it gives you exit signals than to continue to hold. The market will warn you that something is not right. In this case YOU WOULD HAVE EXITED 11 MONTHS BEFORE THE **** HIT THE FAN. So you would not have been holding the stock when ABC went belly up. Unlike the Buy and Hold investor who would not have seen it coming. The market told you one year prior that something was amiss (pre-GFC onset). Even though nothing showed up in the company's fundamentals for a year.

Postscript: It turns out that it wasnt a big deal - the Australian Govt stepped in and guaranteed the leases and continued operation of the centres, and they were ultimately transferred to G8 Education. There was no interruption to FET's business - bar a few centres that G8 did not want to take over (which were subsequently leased to new operators).

I didn't follow FET at the time so I am not qualified to comment on the specifics of the fundamentals of FET at that time. The point I was making was that having 95% of your properties rented to one operator is inherently risky enough to put my kind of long term investor off ever buying FET. IOW this long term investor that your trading plan saved may not have ever existed. However, let's say they did exist and did exit missing the worst of the collapse. Would this same investor have jumped in again at the bottom given the fundamentals at the time? I would say no, as I imagine at under 15c there would be no expectation of any more dividends from FET, ever. To me FET looks like a pure traders speculative stock. No doubt some who chose to take on the huge risk of buying at the bottom were well rewarded. But this is nothing to do with any long term steady return mentality.

Nevertheless, it is good for shareholders that FET was finally was rescued.

SNOOPY

[percy]

Yay Percy, your two long years in the wilderness may finally be over :t_up:
(shame we are in a crappy market though, which might put the brakes on again).

In the wilderness,no.
More like being at peace.At peace with the world,the markets and myself,with the knowledge I have invested in quality.
"Buy the best,and you get the best results",it really works..
Sometimes it takes the market time to catch up,but it does.!

[percy]

You are very zen Percy. But the fact still remains, having your money invested for over two years in a stock that is rangebound is an opportunity cost. If you cant find anything better to buy in that period then fair enough, hold on to it, but if it means that you have limited capital to invest in shares that have doubled/tripled/quadrupled in that time, you have not maximised your profit potential. I focus more on opportunity cost than future rebounds - I like my money to be working as hard as possible all the time, not just in little spurts now and then.

Bit like being employed,unemployed,part-time work,contract work,no work.
I am happy that EBOS has worked "all the time "for me over the past 25 years,and have laid the solid foundations for the next 25 years.

[Beagle]

I wonder how well you would have done in Apple for the last 25 years Percy ? I think KW has made a great point. Yes EBOS has finally broken out of being range bound and is up 15% on where it was 2 years ago but there's been a vast array of stocks that have done much better than 15% in the last 2 years. I think its easy to get emotionally attached to stocks that have done really well for you in the past and what we have here is a fine example of exactly that.

[blu3]

Much appreciated KW, thanks again!

[Snoopy]

This is a thread on timing entries and exits - not on picking stocks.


It was you in your post 142 that said when talking about:

"It is exceptionally useful for managing long term investments that would traditionally be categorised as "Buy and Hold".

Then you went on to demonstrate this with a traditional 'buy and hold' investment that plunged by 90%! I put it to you that most traditional buy and hold investments do not do plunge by 90%. From my own experience the one that came closest to behaving in this way was Telecom New Zealand. For a while there, I was down between 30 and 40 percent on my invested capital. However, time heals most stock market 'income generating asset' wounds. Taking into account the pro-rata Chorus shares I got, and a capital return, I am now back in the black in 'capital terms' on my original Telecom investment capital. Of course I have had a steady steam of dividends at a good yield rate while I was waiting for my capital to recover. With hindsight, buying more in the downtrend helped too.



It discusses what to do once you have already committed to a stock - not whether you should buy it or not.


I do my own research when 'committing' to a share. That involves reading at least five years worth of annual reports cover to cover (usually more). That gives me enough background knowledge to be able to ride out any market noise. IMO you shouldn't buy a share that would give you any distress if the market were to close for five years.



Plenty of REITs are exposed to single customers (BWP = Bunnings Warehouses) and there are thousands of unlisted real estate trusts that hold a single commercial building.


I wouldn't have a problem owning a REIT exposed to largely one customer provided I had say ten of them. But if I had ten, then a 90% plunge in the value of FET would represent a 9% fall in my overall REIT portfolio, so not a major drama within a wider REIT investment strategy.



Regardless, TA is most valuable in pointing out that you have made a mistake in your stock picking - by signalling an exit! Which is why its better to listen to the market than trust your own stock picking skills.


A mistake is when you need to sell something to buy something else. Selling a share to Mr Market is always optional. There is no point in being constantly worried about market volatility.



There isnt a single person alive who has a 100% perfect record of picking stock winners. You work with what you've got, and use things like TA to help you see the things that you dont know about.

You don't have to have a 100% perfect record to be a successful stock investor. TA will not give you a 100% accurate signal to adjust your portfolio by either.

SNOOPY

[Longhaul]

Does anyone know where to get historic Volume Weighted Average Prices from?

[ratkin]

But in another classic illustration of why buying and holding is for fools

Using the stock to claim that buy and hold is for fools, is ridiculously simplistic, naive and unnecessary

Why do so many traders feel the need to take constant swipes at buy and hold?

[ratkin]

Feel free to start your own thread on how buy and hold is better than timing trades. Prove us all wrong.

Nothing to prove, it not a competition. Just picking you up for saying Buy and hold was for fools

[ratkin]

Lets go back to the chart, and take a look at what happened between 2013-14. KW seems to think that good traders would have held this stock from .4c all the way up to the top. Would they really have , in real time? Rather than the hindsight wonderland that KW inhabits.

Lets be generous and assume, those lucky few who were in at .4c didnt take profits when the stock doubled, or any of the other tempting sell out points along the way.

I have shown the chart with a conservative , weekly impulse system, where red bars equal a sell signal. That big red bar in December 2013 would have had most traders heading for the exit door. And why not, if they sold at 40c they made a very healthy profit. .4c all the way to .40c.


If that wasnt enough to shake out the die hards then the next correction almost certainly would have From .69c in April 2014 all the way down to 37.5c just a couple of months later. In KWs own words, only a buy and hold fool would stick around for those losses.



7729

[Hoop]

Lets go back to the chart, and take a look at what happened between 2013-14. KW seems to think that good traders would have held this stock from .4c all the way up to the top. Would they really have , in real time? Rather than the hindsight wonderland that KW inhabits.

Lets be generous and assume, those lucky few who were in at .4c didnt take profits when the stock doubled, or any of the other tempting sell out points along the way.

I have shown the chart with a conservative , weekly impulse system, where red bars equal a sell signal. That big red bar in December 2013 would have had most traders heading for the exit door. And why not, if they sold at 40c they made a very healthy profit. .4c all the way to .40c.


If that wasnt enough to shake out the die hards then the next correction almost certainly would have From .69c in April 2014 all the way down to 37.5c just a couple of months later. In KWs own words, only a buy and hold fool would stick around for those losses.


Nice example Ratkin....A successful buy and hold scenario...this doesn't always happen with penny stocks gone mad though does it..so a buy & holder takes a big risk investing in a penny dreadful stock to begin with with the die hard strategy of staying in even after it became a 17 bagger..... compared to the trader.....

But remember we are using a trader as the alternate player..If the buy & holder thinks this is an excellent stock and willing to take the big risk of staying "in" then its natural to assume that the Trader will also have the same views that it is an excellent stock and after the disciplined trader sells out on the sell signal, he/she will wait for the next buy signal to re-enter (lets be very safe and conservative and use the confirmed up trend at a higher high of 44+c) so lets say the conservative trader re-enters at 45c and rides it up again only to exit once again after the candle stick island containing the engulfing bearish candle at the exhaustion gap around 57c and being conservative the trader is probably still out ...but will be watching closely now as it must be close to triggering a buy signal again

so with the buy & holder having the "see I told you so" ideal situation over the trader whose TA discipline didn't have ideal conditions and was forced to sacrifice some profit with annoying entries and exits, who is better off?..

Lets say both bought 100,000 shares at 4c
B&H = 100,000 *4c = $4000...now has $54,500.....$50,500 Gain with increased risk
Trader=100,000*4c = $4000...out at 40c ...$40,000... in again at 45c cost $45,000... out again at 57c collected $57,000 less the extra $5,000 cost = $52,000 Gain with decreased risk.

A mute point but the trader may have to fork out an extra couple of hundred bucks in trading fees.

[ratkin]

Nice example Ratkin....A successful buy and hold scenario...this doesn't always happen with penny stocks gone mad though does it..so a buy & holder takes a big risk investing in a penny dreadful stock to begin with with the die hard strategy of staying in even after it became a 17 bagger..... compared to the trader.....



I only provided the chart to point out to KW that traders would not have held all the way up. By the same token, while buy and hold merchants would have possibly stayed in all the way up, they would likely have given up most of the gains when the stock plummetted a few months ago. Mainly because there was no news to indicate failing Fundamentals just a falling Shareprice, a tricky situation for fundamental buying and holding.
In that regard KW has a valid point that Buying and simply holding would have not worked out to well on this particular stock.

The only people who possibly would have ridden the share all the way up, and still managed to sell at a reasonable point on the way down would have been active investors. I would term an active investor as someone who buys based on good fundamentals, but also uses rudimentary TA to help avoid trouble. Especially useful at the more speculative end of the investing spectrum.

An active investor would still have a stop loss in place, however it would likely be further from the price action than most traders, which might have allowed them to stay in all the way up (although its doubtful with the 40% decline in 2014.

Active investors are a more accurate discription of buy and hold investors. KW seems to believe buy and hold to mean, never, ever selling, this clearly isnt the case. Most active investors when on a ten bagger would have taken some profits on the way up simply to rebalance their portfolios , as their holding in this particular stock wouod have become very overweight leading to an unbalanced portfolio.

Then on the way right back down in 2015 at some point most buy and hold investors would have realised all was not well, as the price began to plummet, and sold out.

Just to sum up i showed the chart not as an example of buy and hold versus trading, it Was KW who bought buy and hold into the debate. I was merely ppinting out that traders were very unlikely to have held all the way up, as KW claimed.

[Hoop]

NZ Herald Quote:... (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11571849)The New Zealand dollar, after a stellar run last month, has been brought back down to earth as concerns about China, world economic growth and lower commodities prices take hold.

"Stella" ...."bought back to earth".....huh?..Really!!

Well..there's a good chance media will be right about this latest fall ...the 65c support is under all sorts of Bear cycle pressure and is expected to break at some point in time.

The media are always late especially when it comes to investing....and seem to make up for it with dramatics..
The NZ$ has been falling for 18 months now...so the news is a bit stale...closing the stable door after the horses have bolted.....eh?

http://i458.photobucket.com/albums/qq306/Hoop_1/NZvUS%2010012016.png (http://s458.photobucket.com/user/Hoop_1/media/NZvUS%2010012016.png.html)

[Hoop]

A simple rule when timing buys.."Don't buy into a down trend"***
When to buy in?...after the downtrend has ended ...a higher high after a higher low.

***On the IQE chart below..I have included small blue/red arrows using a bear market investor strategy used by TA advanced investors..the sucker play..It's a dangerous game as one can get burn't with a sudden fall as was the case in November 2015

http://i458.photobucket.com/albums/qq306/Hoop_1/IQE%2010022016.png (http://s458.photobucket.com/user/Hoop_1/media/IQE%2010022016.png.html)

[Baa_Baa]

@Hoop, nice IQE chart, like the legend Phaedrus did. Put it on the IQE thread ;)

[Hoop]

AIR on Tuesday 26th April broke all sorts of TA indicators and chart patterns and triggered mass sell signals when it fell below $2.80..To a TA investor mass sell signals are serious..the discipline screams out "SELL" and yet wednesday thursday friday we witnessed ST posters buying in like crazy especially when the market opened...they have mistimed their buys because they failed to observe one very basic share investing rule Don't buy during a down trend..and..two..not understanding the present trading behaviour happening with AIR
Charting and TA indicators are graphic images of present and past trading behaviours....often charts show different images all layered together...I have been posting chart price boundary patterns such as rectangle pattern (trading range) and supports and resistances and so at times I was more favourable towards AIR depending where the price was ...e.g more bullish at lower end boundary supports and more bearish around resistances of higher end boundaries...I did not mention the slowly forming Head & shoulder pattern as it was not at that stage a concern and the charts I posted where cluttered enough..Actually, in theory a chartist doesn't action a H&S pattern until the breakout occurs..
I posted that technical damage had occurred (in other words very high risk to buy now) but got knock down in flames by the verbal few..Their actions of filling up the AIR thread with rosy FA and forward FA verbal pollution resulted in an excellent post by Xerof being totally swamped and missed

Classic.

A nice head and shoulders (bearish) has completed. An eyeball measured target looks to be around 2.15, but there will be support at that old resistance at 2.25 imo.

dyor on h&s

Ok below is a AIR chart stripped of all its TA layers except for the H&S Pattern...It is a great textbook example of a chart pattern which is the most reliable of all chart patterns..once the H&S pattern is completed (when the breakout occurs) there is a 96% chance the shareprice will fall more than 5%.. yet when the technical damage occurred (I posted the warning) I saw the inexperienced posters swayed by the verbal few into buying...buying on the 26th and 27th and 28th almost guaranteed their buys as being mistimed
Some of these influenced people never saw it happening and even now are total confused as to why AIR trading behaviour happens like this

I'm still baffled by this.

QAN although has taken a tumble is trading at a 2016 P/E just below 6, S&P 500 airlines index trade at a forward P/E of around 7.5.... AIR is trading at a P/E of around 4.5...

Sure, QAN has signaled softened demand & oil prices have risen... but relative to prior years, tourism is high & oil is still relatively cheap.

Is it just the market's expectation of these macro economic drivers to continue to get worse? Or is there something else driving this?

My apologies if these all seem blatantly obvious, still getting my head around airline stocks! The sell off just seems overdone IMO on the face of it all.

...Seeing these people influenced made me feel sick...and emotionally drained..I had to have a few days off ST..

Xerof has a target price of 2.15 I guess those calculations where using highs/lows..My chart calculations is using closing day prices...there's no right or wrong here as the target price.

Of more complexity when other patterns and TA incators are added in as chart layers we can see possible supports on the way down towards 2.19 target price which would affect the 46% odds of the theoretical happening...But I will leave the more complex stuff to another day


http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2029042016%20HampS.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2029042016%20HampS.png.html)

[Baa_Baa]

@Hoop @Xerof .. I can see the H&S but can't correlate the suggested target to any other price supports. What does stand out is the 4-year rising support trend line which converges around $2.35 with the Jun/Sep15 lows horizontal support. This weekly chart illustrates.
8009

[Hoop]

@Hoop @Xerof .. I can see the H&S but can't correlate the suggested target to any other price supports. What does stand out is the 4-year rising support trend line which converges around $2.35 with the Jun/Sep15 lows horizontal support. This weekly chart illustrates.
8009

The target price is a line drawn in the sand, it is not a support line..it is not act as a S&R line so the shareprice should not be affected unless of course if everyone uses the same measure...This measure to calculate the target price is the standard one used for H&S pattern but no doubt there are others measures Bullowski mentions a better method using the difference from Left hand neck to Head and then subtract the difference downwards from that same left hand neck TP = 2.65 - (3.22 - 2.65) = $2.08.. This measure can be used for all H&S patterns especially those with very steep necklines..
TP is a trading tactic, it works off the chances of reaching a certain price level to which traders start to take notice of the stock again, so there is no right or wrong answers just differing odds to reach the suggested TP..The standard measure I used finding TP of 2.19 has a 46% chance of reaching that TP...Xerofs 2.16 has lesser odds probably about 40%...(assuming AIR is in a Bull cycle)..

Bulkowski Book.. Encyclopedia of Chart Patterns..has this H&S pattern statistical data table

Decline (%).... Bull Market.... Bear Market
5 (breakeven)......4%.............. 1%
10 .................. 15%.............. 5%
15 ...................35% .............17%
20 .................. 54% .............33%
25 ...................68% .............49%
30....................78% .............63%
35 ...................86% ............ 71%
50 .................. 97% ............ 93%
75 ................ 100% ........... 100%
Over 75...........100% ........... 100%

The table says for example that 54% of the H&S patterns happening within a bull market cycle have ended their fall at or less than 20% after the breakout...Also there hasn't been a H&S pattern found that the shareprice has fallen more than 75% after the breakout.

There are factors which affects these odds...the 2.35 support line/trend line conjunction area you mentioned Baa Baa would be one factor

[Snow Leopard]

@Hoop @Xerof .. I can see the H&S but can't correlate the suggested target to any other price supports. What does stand out is the 4-year rising support trend line which converges around $2.35 with the Jun/Sep15 lows horizontal support. This weekly chart illustrates.
8009

Find yourself a charting package that does a log price axis and you will see that the '4-year rising support trend' was well and truly broken by Friday 22-Apr.

200 day EMA broken by the closing price of Friday 22-Apr.

THEN the SP slid down the shoulder.

Best Wishes
Paper Tiger

Disc: Yes on my hobby horse about the use of log charts - again :p

[Baa_Baa]

@Hoop, thanks for the explanation :cool:. @Paper Tiger, thanks for the reminder ;):p

Using the Weekly chart again, but Log Scale, the convergence of support (4-year trend line & horizontal at $2.35) just "goes away". Pffttt, just like that, big MA's smashed, LT trend line smashed, convergence gone and only the $2.35 horizontal offering support, below that questionable $2.30 and clear $1.75.

8011

Not pretty. What surprised me most about the discussion on AIR was that the words 'stop loss' have not been mentioned. Like Buffet said, when the tide goes out we see who's swimming naked. (or something like that).

[Xerof]

I posted that technical damage had occurred (in other words very high risk to buy now) but got knock down in flames by the verbal few..Their actions of filling up the AIR thread with rosy FA and forward FA verbal pollution resulted in an excellent post by Xerof being totally swamped and missed

Hoop and Baa, I've only just caught up with this thread - great work guys in filling in the detail. Sorry, but I haven't the time to be as diligent as you two. I relinquished my charting software quite a while ago so I'm just running on familiarity of patterning these days. I 'eyeballed' a measured target of 2.15 Hoop, so within 4 cents means I can forgo an eye test this year.

Speaking of diligent, I can recall commenting on very similar market behaviour a few years ago, around the 7.50/8.00 levels, generating a hatefest by those who forgot their togs.

[Horse]

Hi all, I've been following this thread and was wondering if I could get some friendly advice on a potential head-and-shoulders pattern on the SUM chart.

I would like to confirm that if the chart completes something like my dotted lines that this would be considered a head-and-shoulders pattern, and that my target price area would be correct.

I've tried to annotate it the same way as Hoop did above as I find his charts nice and easy to follow.

Thanks in advance.

8016

[peat]

Ideally the right shoulder should be similar in time duration, but truth is I'm thinking you are getting a bit ahead of yourself (in terms of anticipating the pattern).

Perhaps at this point one could merely say that $4.40 is playing out as an important zone, and a convincing break in either direction will confirm the trend.

[Horse]

Thanks peat, much appreciated.

[Joshuatree]

I look at this excellent basic charting advice every now and then and repost it to share and refresh myself.There are more invaluable posts from KW to read too a little further in.


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.

[Joshuatree]

Heres another pearler.Unfort most of KW's posts have been deleted when she left..

If you had bought $10,000 worth of FET shares 10 years ago you would have had 6,993 shares (@$1.43) which would be worth $14,545 today (@$2.08). Some might say thats not a bad return - 45% over 10 years. But over that time period you would have had to watch your investment drop to $0.14 - your $10,000 would have been worth $979 at the bottom of the bear market! How well would you have been sleeping then? You would not have gotten back to even until March 2013 - thats 7.5 years before you start to make a profit on your original investment.

However, if you had utilised the most basic of TA exit signals (in this case the 50 and 200 week moving average) you would have sold your shares in December 2007 (breach of the 200 MA) for $1.60 netting you $11,188. You then would have sat out the market drop until September 09, when using your $11k you would have bought back in at $0.38 (price above the 50 MA). This would have given you 29,444 shares which would be worth $61,243 today. Or a 610% return on your money.

45% or 610%? Your choice. Don't get trapped in a bear market. And if you have sold out, don't forget to buy back in once the share price recovers. You don't need to pick absolute tops or bottoms - you just need to be on the right side of the trend.

FYI - FET is an AREIT, a stable dividend paying stock.

[Joshuatree]

A classic example.If one had the discipline to use this for AIR it would have saved one from catching falling knives and being influenced by wannabe Gurus believing the myth they create:cool:

[Xerof]

Gee, Hoop, I see AIR couldn't even retest the neckline.......gulp

[Baa_Baa]

A classic example.If one had the discipline to use this for AIR it would have saved one from catching falling knives and being influenced by wannabe Gurus believing the myth they create:cool:

Possibly, but AIR is so volatile the death cross/golden cross happen after really large SP moves have already happened. I think the 50/200 crossovers suit less volatile shares. Need a faster trigger for AIR imho.

[Hoop]

I look at this excellent basic charting advice every now and then and repost it to share and refresh myself.There are more invaluable posts from KW to read too a little further in.

Yes KW leaving was a big loss for ST..However her thread lives on..lets hope we can keep the thread's quality up to her high standards..

[Hoop]

Gee, Hoop, I see AIR couldn't even retest the neckline.......gulp

Whew.. I dodged a bullet here..I thought with the large number of passionate AIR investors all reciting great earnings, rosy forecast earnings, very low PE Ratio, etc a strong pull back to at least the neckline was on the cards...It was tempting to have a short term dabble to earn my weekly allowance..

[Hoop]

Hi all, I've been following this thread and was wondering if I could get some friendly advice on a potential head-and-shoulders pattern on the SUM chart.

I would like to confirm that if the chart completes something like my dotted lines that this would be considered a head-and-shoulders pattern, and that my target price area would be correct.

I've tried to annotate it the same way as Hoop did above as I find his charts nice and easy to follow.

Thanks in advance.

8016


Ideally the right shoulder should be similar in time duration, but truth is I'm thinking you are getting a bit ahead of yourself (in terms of anticipating the pattern).

Perhaps at this point one could merely say that $4.40 is playing out as an important zone, and a convincing break in either direction will confirm the trend.

Totally agree with Peat

A head & shoulder pattern is not a pattern until the neck is broken...Being aware of a pattern forming is good practice however one should not just focus on one pattern forming as often there are other patterns forming too, some may not be so obvious..
An important rule is not to pre-empt a forming pattern outcome, often one is tempted by the continual bombardment of day to day negative/positive media noise...
An example of this is my long term chart below...look at the many partly H&S formed patterns which nearly all failed to complete..pre-empting SUM would have been a total failure...
Actually as the H&S pattern is very common it is interesting to see SUM with only one (maybe 2 with a stretch of imagination) within a 4.5 year period.

H&S patterns are the most reliable of patterns so it is very common to see a mass sell triggers all firing off at once as seen on the chart below.

The H&S pattern on the chart below is called a complex top Head & shoulder pattern

The other "possible" H&S pattern I mentioned is a down slanted bottom H&S pattern a rather misshaped animal but the neckline break did spark a mass of buy signals.
As many H&S patterns aren't the textbook shaped models they can go unnoticed..

As a Chartist I focus a lot of my intention on patterns..when a chart has few medium term patterns I have to resort to other methods, standard Deviation channels is one of those methods.
The chart below shows secondary SD channels within a longer term SD channel...These secondary channels were drawn in some time ago so when they break down a new SD channel is drawn..If they were drawn today they would look different.

SUM is a beautiful specimen for investors..It is having a great run..Its been a bull market cycle since IPO with only one large bull market correction (and a couple of small ones) ...an overall of +300% increase

Interesting TA example on the Chart...A bearish H&S pattern with mass sell signals is a must sell scenario for a disciplined Chartist..Many would ask why this happened to a fundamentally sound growth orientated company A disciplined chartist won't ask, the chart has decided for him/her....sell!...As the H&S failure rate is 4%, it is remote to assume that the investor fright is a flash scenario no matter how positive the media is As a TAist I always remind myself of the possible scenario that as a individual investor I will be the last to hear the latest news..so if Mr Market tanks then there's probably a good reason..
When TA says sell out of a company that seems to be doing well ..you do and immediately put it on your watchlist and wait for buy signals...In SUM example if you sold 50,000 shares that same money would have bought you 57,000 shares at the next buy signals...added return at a much lowered risk

EDIT: The EMA100 was added in preference to EMA50...The EMA50 seems to be too sensitive for SUM and fires a lot of false signals...Look at how well the EMA100 and MA200 perform.:)


http://i458.photobucket.com/albums/qq306/Hoop_1/SUM%2004052016.png (http://s458.photobucket.com/user/Hoop_1/media/SUM%2004052016.png.html)

[Hoop]

Well we can say that Mr Market isn't acting irrational with AIR..
.The latest depth is showing a number of small buyers at 2.40..so there seems to be some sort of support evolving around 2.40 as predicted from our charts...if 2.40 support fails then all eyes will be on the 2.35 depth area...2.38 something brewing up here??

http://i458.photobucket.com/albums/qq306/Hoop_1/air%20depth%2005052016.png (http://s458.photobucket.com/user/Hoop_1/media/air%20depth%2005052016.png.html)

[Horse]

Totally agree with Peat

A head & shoulder pattern is not a pattern until the neck is broken...Being aware of a pattern forming is good practice however one should not just focus on one pattern forming as often there are other patterns forming too, some may not be so obvious..
An important rule is not to pre-empt a forming pattern outcome, often one is tempted by the continual bombardment of day to day negative/positive media noise...
An example of this is my long term chart below...look at the many partly H&S formed patterns which nearly all failed to complete..pre-empting SUM would have been a total failure...
Actually as the H&S pattern is very common it is interesting to see SUM with only one (maybe 2 with a stretch of imagination) within a 4.5 year period.

H&S patterns are the most reliable of patterns so it is very common to see a mass sell triggers all firing off at once as seen on the chart below.

The H&S pattern on the chart below is called a complex top Head & shoulder pattern

The other "possible" H&S pattern I mentioned is a down slanted bottom H&S pattern a rather misshaped animal but the neckline break did spark a mass of buy signals.
As many H&S patterns aren't the textbook shaped models they can go unnoticed..

As a Chartist I focus a lot of my intention on patterns..when a chart has few medium term patterns I have to resort to other methods, standard Deviation channels is one of those methods.
The chart below shows secondary SD channels within a longer term SD channel...These secondary channels were drawn in some time ago so when they break down a new SD channel is drawn..If they were drawn today they would look different.

SUM is a beautiful specimen for investors..It is having a great run..Its been a bull market cycle since IPO with only one large bull market correction (and a couple of small ones) ...an overall of +300% increase

Interesting TA example on the Chart...A bearish H&S pattern with mass sell signals is a must sell scenario for a disciplined Chartist..Many would ask why this happened to a fundamentally sound growth orientated company A disciplined chartist won't ask, the chart has decided for him/her....sell!...As the H&S failure rate is 4%, it is remote to assume that the investor fright is a flash scenario no matter how positive the media is As a TAist I always remind myself of the possible scenario that as a individual investor I will be the last to hear the latest news..so if Mr Market tanks then there's probably a good reason..
When TA says sell out of a company that seems to be doing well ..you do and immediately put it on your watchlist and wait for buy signals...In SUM example if you sold 50,000 shares that same money would have bought you 57,000 shares at the next buy signals...added return at a much lowered risk

EDIT: The EMA100 was added in preference to EMA50...The EMA50 seems to be too sensitive for SUM and fires a lot of false signals...Look at how well the EMA100 and MA200 perform.:)


http://i458.photobucket.com/albums/qq306/Hoop_1/SUM%2004052016.png (http://s458.photobucket.com/user/Hoop_1/media/SUM%2004052016.png.html)

Cheers for the detailed response, Hoop. Lots for me to go away and think about.

[kiwichick]

I think this is the most valuable thread on Sharetrader. I got caught up in the hype over AIR and didn't sell when I should have due to focusing on the fundamentals and expected dividend (and getting caught up in all the rhetoric from the cheerleaders over on the AIR thread). Lesson learned. Still haven't sold - don't intend to now. Will just wait it out and chalk this all up to experience.

[Hoop]

XXXX asked be a simple question of where TA buy points are. He admits TA is not his strong suit. Instead of me saying there's none yet, I thought I better qualify the answer with a quick education but it sadily it turned into a rambling Sunday TA rant...Sorry XXXX

Hi XXX
First of all..

TA is a graphic portrayal of group behavior...Question: does your personal assessment of AIR line up with what TA is saying...It should!!! it tells you the bears (some are big money bears) are beating the bulls atm

There is a sense that the bulls are trying to find (mentally) a bottom and they sense that it is at 2.35 because all other supports so far have failed..the steep drop can't last forever and there's this good FA/ poor shareprice conflict which seems "irrational".. Also there are investors riding out this storm..they are suffering emotional pain which they didn't expect and some are looking to quit out but at a higher price than now (bear) some will create a mirage of happiness through a lesser overall loss by averaging down and relying on hope to change the red ink to blue ink (bull)

On the bear side we have.
1...Competition heats up (Cyclical theory says this event occurs near the top of all cyclical cycles)
2...VAH doesn't help AIR's balance sheet
3...Investor sense of disbelief towards Management Hype
4...$3 share price was too high (using valuation methods specifically for cyclical stocks)..Share price should be $x

What is the $x price..Answer when bulls behaviour (feelings) out number the bear behaviour (feelings) and trepidation outnumbers intrepidation

Chartwise.. the bull/bear line shows where feelings may reverse....If the price bounces off upwards the Stock stays in a Bull Market cycle (higher highs/higher lows) a bull market correction has played out and a bottom is set in place...
If the price falls below the bull bear line it means the bull market cycle may be over ..if the price falls to the next support $2.25 (an old support 2yrs) and bounces up (respects) this may not be a bottom as AIR could be in bear market cycle (lower highs/lower lows) and that support respect maybe temporary

Isn't AIR already in a Bear Market Cycle ??
Conventional investing says Yes>20%...TA Charts says no not yet as the Bull/bear line is at .. $2.35.

There are other chartable ways of assessing investors feelings during sudden falls..Fibonacci Retracements are very spooky ..38.2% and 61.8% are the most known areas.. (there are other points as the price falls to greater extremes)..
AIR price 2.36 at the moment is ..bang on 38.2% (see Baa Baa's post on the AIR thread).

There are other TA indicators that gauge investor behavoural changes....The quicker more sensitive indicators are oscillators, MACD and Stochastics tend to be the favourites among investors using basic simple TA or should I say misusing...the misuse involves using only indicators that agree to reinforce their "set in stone" belief such as when to get in/out quickly...e.g sensing a bottom...These people then blame TA if their beliefs turn to custard..


Overall..it depends on the masses and especially those with the most money that rule which way the market goes


Question:..So where's the bottom using TA?....Answer: Don't Know...Why: Because TA can't predict the future..

And neither can FA or anyone else!!!..many may say the bottom is in at $2.35 but it is an opinion not fact (yet).

TA is an analysis of historic data..Observation has noticed certain price areas have a greater chance of reversion such as Primary trend lines (already failed) major Support areas (bull/bear line at $2.35) and Fib Ret at 38.2% ($2.35) and 61.8%. However favourable TA areas do and often fail to revert (logic.. for a 61.8% area to be reached a 38.2% area has to have failed)..TAer's can analyse historic data predict and at best create a probability of an happening.

I'm not sure what AIR's $2.35 probability of being the bottom is (not enough NZX data), but this area has a higher probability than other area's in proximity on the chart, as it has the 38.2% FIB RETand major support (bull/bear) line in it's favour..

Would I invest now?...Answer..Me personally Hell No!!!...I'm a wimp when it comes to Cyclicals behaving badly and also my TA discipline forbids me...It depends on your risk tolerance and bank balance..Yes AIR is at a support area so buying v risk is more favourable than near a resistance area and dabbling is OK but risking your house is NOT OK!!...Cyclicals as I've mentioned so often before are scary stocks, they are volatile..their falls hurt portfolios...Preempting a bottom is risky business therefore the rewards are higher.. Cyclical stocks in their volatile phase have very high risks..Is AIR's rewards high enough at the $2.35 level ..In market theory if nearly everyone says yes then it will be a market bottom (for now?)...

IF you can't help yourself and buy in at $2.35 then apply tight stops...remember volatility may not be your friend, even your tight stops may fail to get you back out in time..

For me Investing 101 applies.. Don't buy into a downtrend.. wait for buy signals

[Mista_Trix]

This makes me really sad.

This thread was by far the most useful thing I've found in my investing career and it would appear all of KWs posts are gone bar the first.

Did anyone happen to grab a copy of this thread while her opinions were still around?
I'd greatly appreciate a it. I've just taken a read through of the entire thread and its substantially smaller. There are a few that have been immortalised as quotes in other posts, but most are gone :(

Any help greatly appreciated.

[kiora]

This makes me really sad.

This thread was by far the most useful thing I've found in my investing career and it would appear all of KWs posts are gone bar the first.

Did anyone happen to grab a copy of this thread while her opinions were still around?
I'd greatly appreciate a it. I've just taken a read through of the entire thread and its substantially smaller. There are a few that have been immortalised as quotes in other posts, but most are gone :(

Any help greatly appreciated.

Here is one I copied Mr TX from KW.I agree ,sorely missed
KW
I keep reiterating that TA does not predict anything nor does it guarantee anything. So yes, not everything works out according to plan. Lately I've been buying stocks in threes - and usually one of them turns out to be a dud, and gets sold within a few months of being purchased. Last couple to have turned out like that has been FMG and SHL.

Likewise, not all stocks that get sold due to a breach of the 200 day MA carry on into a downtrend, some recover quite nicely. Like CAJ, MTU and MFG. But its probably an 80-20 strike rate with the sell signals, the vast majority turn out to be timely exits.

I use TA primarily as a risk management tool rather than a trading tool. In other words, I'd rather be out of a stock and lose the first upward movement, than be in a stock that fails to form an uptrend and results in lost capital. Likewise, better to have sold a stock and locked in profits, than to run the risk of a downtrend forming and losing it all. Its better to make a small profit often, than to lose a lot of money trying to make a big profit. I think once you accept that that strategy works, you don't worry so much about missing out on a few percentage returns in the early days in return for many months or years of being in a profitable investment.

[kiora]

This makes me really sad.

This thread was by far the most useful thing I've found in my investing career and it would appear all of KWs posts are gone bar the first.

Did anyone happen to grab a copy of this thread while her opinions were still around?
I'd greatly appreciate a it. I've just taken a read through of the entire thread and its substantially smaller. There are a few that have been immortalised as quotes in other posts, but most are gone :(

Any help greatly appreciated.

Another one from KW or Hoop ?
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


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

Another great example is SIV - entry point is end of February ($5.90 - $6.28)
Attachment 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

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]

I find T/A fantastic as an invaluable tool for timing in or out of a investment along with F/A. Its all about risk management first and foremost.
Im prepared to take some questions for a limited period and forward them to KW and share the reply if anyone is int;PM me.

[heisenberg]

You are enquiring how to find a short FA list to apply TA to, I use a simple formula developed years ago, (pre computers)I think originally it might have had its roots with Buffet and Munger, I use it to monitor the entire ASX and NZX usually producing less than twenty
companies worthy of a closer look. Google "CGVI" comparative growth & value indicator, and see what you can find, if you have further questions ask them here

Does anyone still use CGVI?
When converting a CGVI to an optimal buy price, what exactly does "ABS" stand for in the calculation and how can it be found?

Here is the calculation here:
•OPB = ( EPSc +DPSc ) /(ABS ( 25 -(( EPSc - DPSc) / NTA$)) )

[heisenberg]

https://en.wikipedia.org/wiki/Absolute_value

Thank you!

[black knat]

Any TA views on OHE? Broke out of a serious downtrend earlier this year - stock seem to have a mind of its own with little to do with fundamentals/ prospects. Am holding.

[heisenberg]

Any TA views on OHE? Broke out of a serious downtrend earlier this year - stock seem to have a mind of its own with little to do with fundamentals/ prospects. Am holding.

Hold.
Negative EPS, negative PE ratio, DPS zero - I wouldn't be touching OHE right now. Short term players may have a different view if they are hoping to make a quick buck.

But seeing as you've already ridden the trough out might as well stay put. If the 50 day moving average falls below the 200 DMA I'd reassess, guess it depends on your own investment style. In saying all of this I don't hold any OHE and haven't looking into the company much at all other than the base figures.

[percy]

Any TA views on OHE? Broke out of a serious downtrend earlier this year - stock seem to have a mind of its own with little to do with fundamentals/ prospects. Am holding.

Maybe the start of a new uptrend with the last sale at $4.25, well above the 50 day EMA $3.74,the 100 day EMA $3.61 and the 200 day EMA $3.73.

[kiora]

Any TA views on OHE? Broke out of a serious downtrend earlier this year - stock seem to have a mind of its own with little to do with fundamentals/ prospects. Am holding.

May be closer to break even on cash burn
EV/Revenue 3.43 compared to Xero 6.31
http://www.4-traders.com/ORION-HEALTH-GROUP-LTD-22304681/news/Orion-Health-Why-the-Orion-Health-Group-Ltd-share-price-jumped-30-in-April-22160324/
I have sold a few OHE lately to buy VGL when there was a sell down

[Hoop]

Any TA views on OHE? Broke out of a serious downtrend earlier this year - stock seem to have a mind of its own with little to do with fundamentals/ prospects. Am holding.

Good on ya Black Knat for holding and not selling now..(I hope you didn't hold from listing :mellow:)...OHE is in an steep uptrend (unsustainable in the long term)...The Chart Rule:..You buy into up trends and then accumulate just above new supports. In other words you accumulate when the breather or bull market corrections end....
Logic...Lesson 1 page 1 of investing course 101..Buy into up trending stocks and sell out of down trending stocks ..Therefore the assumption is, don't buy into down trending stocks**.
**You should be a skilled investor when buying into a downtrend to play the Sucker game..

For 90% of investors FA homework and Simple charting skills is all you need to be successful...actually just applying the simple chart skills will do the job most of the time..Charting is just a visual investor group behaviour so the assumption is that the investor group has done the FA and all the other homework for you and their behaviour shown on the chart is the result..

Below is the simple chart going back to the OHE listing....The charts got you out early kept you away from the tempting sucker rallies and got you back in boots and all with lowered risk at $3.20..
Its been accumulation time since then (and still is)...

http://i458.photobucket.com/albums/qq306/Hoop_1/ohe%2013052016%20s.png (http://s458.photobucket.com/user/Hoop_1/media/ohe%2013052016%20s.png.html)


For some psychological silly reason people see simple as inferior...so below is a more complex and busier chart..pour yourself a wine loosen up the brain and take your time.

http://i458.photobucket.com/albums/qq306/Hoop_1/OHE%2013052016.png (http://s458.photobucket.com/user/Hoop_1/media/OHE%2013052016.png.html)

[kiora]

Good on ya Black Knat for holding and not selling now..(I hope you didn't hold from listing :mellow:)...OHE is in an steep uptrend (unsustainable in the long term)...The Chart Rule:..You buy into up trends and then accumulate just above new supports. In other words you accumulate when the breather or bull market corrections end....
Logic...Lesson 1 page 1 of investing course 101..Buy into up trending stocks and sell out of down trending stocks ..Therefore the assumption is, don't buy into down trending stocks**.
**You should be a skilled investor when buying into a downtrend to play the Sucker game..

For 90% of investors FA homework and Simple charting skills is all you need to be successful...actually just applying the simple chart skills will do the job most of the time..Charting is just a visual investor group behaviour so the assumption is that the investor group has done the FA and all the other homework for you and their behaviour shown on the chart is the result..

Below is the simple chart going back to the OHE listing....The charts got you out early kept you away from the tempting sucker rallies and got you back in boots and all with lowered risk at $3.20..
Its been accumulation time since then (and still is)...

http://i458.photobucket.com/albums/qq306/Hoop_1/ohe%2013052016%20s.png (http://s458.photobucket.com/user/Hoop_1/media/ohe%2013052016%20s.png.html)


For some psychological silly reason people see simple as inferior...so below is a more complex and busier chart..pour yourself a wine loosen up the brain and take your time.

http://i458.photobucket.com/albums/qq306/Hoop_1/OHE%2013052016.png (http://s458.photobucket.com/user/Hoop_1/media/OHE%2013052016.png.html)

Thanks Hoop.I agree with what you're saying.The weak point may be average daily volumes in my view haven't been great so could turn quickly?Who's buying?Funds or small investors?No big volume up days that I have seen.

[Grunter]

Question - How well does TA give a forward indication as to when you should enter or exit, rather than confirm when you should have entered or exited?

[Hoop]

Question - How well does TA give a forward indication as to when you should enter or exit, rather than confirm when you should have entered or exited?
TA crystal balls are just as reliable as FA crystal balls..The difference is TA data is historical- up the moment whereas FA is historical up to the last financial news released by the company..FA makes up for this data lag by getting ongoing information and misinformation from the media which is in your face every moment of the day.

There is a myth that TA always tells you after the event..Chartists like me post charts which shows previous events if I didn't show past events there would be no chart to produce..eh. For the record TA tells the past and also up to the moment of the last trade..

For the investors trying to understand charts..think charts as an ongoing story or TV series, the viewers/readers have seen what happened, they can perceive where the story is heading and so can best guess what going to happen next..There are many stories and all stories can be categorised.. some stories are exciting with extreme oscillating plots between good and evil, always have twists and often have unsuspecting outcomes. These are your high risk, High beta (volatile), undervalued stocks e.g cyclical stocks type category..Some stories are boring because you already know the outcome (continuing trend)...e.g these are your low risk, low beta, fully priced/ top of the fair price range(overbought) stocks.. ....then you have investor perceived (forward looking) stocks, software, drug trialers, miners etc which every now and then go like a rocket into the stratosphere (and many unfortunately fall back to earth again)..which due to the sudden volatility TA is often caught out..I never know what to do with these stocks as my TA discipline is often no help to me..I'm usually very wary buying into a stampede (I like to know my probability of success and when to get out) and so I always end up with the feeling "He who hesitates is lost".

So Grunter to answer your question "... How well does TA give a forward indication as to when you should enter or exit.....Answer..It depends :cool:.

It is difficult question to answer as explained above about the stories...Also in practice, it depends on the Stock Category (e.g operates within a cyclical business sector) and its individual behaviour (the types of shareholders that actively buy/sells that stock's shares).. some stocks behave well (TA friendly), some don't ("TA Bitches".. e.g Games of Thrones ..you don't know who's going to die in the next episode and those who die sometimes don't stay dead)..

However using charts you can get to identify the "TA Bitch" stocks which are up and down and all over the place with no trend or pattern..As a rule Chartist like me tend to avoid these stocks as there are plenty of TA friendly "predictable" stocks in the world to make money from..
The Experimenting some TA thread (http://www.sharetrader.co.nz/showthread.php?10416-Experimenting-some-TA) is useful Blu3 came up with some TA friendly stocks which we had fun played around with..TGR was (is) very predictable..

Actually TGR has broken out so I've just got back in at opening at $4.14 so far down 3c..my timing sucks ..eh?

[black knat]

Thanks Hoop. Appreciate it. I went through all the growth stocks at the start of the year. Bought OHE, amougst others in a shuffel around. Was overpriced in the listing as we know. But I thought we might see a resurgence in growth stocks. Still annoyed about DIL.

[Hoop]

Thanks Hoop. Appreciate it. I went through all the growth stocks at the start of the year. Bought OHE, amougst others in a shuffel around. Was overpriced in the listing as we know. But I thought we might see a resurgence in growth stocks. Still annoyed about DIL.
Yes ...DIL stuff happens..I got annoyed with Frucor..

Mr Market seems to have changed focus from growth stocks to good dividend yielding stocks with stable income flows (defensive stocks)...I have this change of Market behaviour as one of my "ducks":) signaling the topping of the Bull Market Cycle.

The HealthCare sector is classed as a non-cyclical industry, so it's a defensive investment sector

I wouldn't think anyone would class OHE as a defensive stock but it does operate within the Health Care sector...

Anyway...TA doesn't care about anything I've just written, TA just measures how well OHE is doing and at the moment OHE is running very well..A successful investing saying... "quit your loses and let you profits run"

[Hoop]

Back to AIR.
AIR Price so far today 2.29 -2.31 currently 2.29 up 1c

Baa Baa ..Looking at your monthly chart 7th May 2016 #6209 page 414 (http://www.sharetrader.co.nz/showthread.php?1088-AIR-NZ/page414) on the AIR thread...gee..AIR's fall seems to be hesitating (about a week now) around that 38.2%FIB ($2.34?) area** and is becoming spooky..also a 13 month old support there as well..Could there be a relief rally off this area? After a steep fall one would expect a dead cat bounce off some point..FIB + support point is good as any other point?.
I've been very successful with dead cat bounces by sticking to the dead cat bounce rules but there's seems to be too much risk here though... if this support fails it's another 10% down to the next supporting area which is 9 year old...

your/others thoughts on this

** 38.2% FIB (daily period)............2.36
38.2% FIB (weekly period).... 2.28 :ohmy:
38.2% Fib (monthly period)......~2.34

[Baa_Baa]

@Hoop, agree regarding horizontal support though I have the weekly 38.2 fib at $2.34, same as monthly (week of Jun8 2012 low to recent high.). The 10MA is right on $2.34 as well. The SP is still below at $2.26 though does seem to be settling (below the fib resistance). Too risky for me to play with dead cats.

[Hoop]

@Hoop, agree regarding horizontal support though I have the weekly 38.2 fib at $2.34, same as monthly (week of Jun8 2012 low to recent high.). The 10MA is right on $2.34 as well. The SP is still below at $2.26 though does seem to be settling (below the fib resistance). Too risky for me to play with dead cats.

Yeah agree...
Air is up today, running against the Market as did the Global airlines index ($XAL) (http://stockcharts.com/h-sc/ui) on Wall St this morning (NZ Time)..

I'm no candlestick expert, but referring back to that $XAL chart (http://stockcharts.com/h-sc/ui) again I think I see a nice example of a dark cloud cover with its next day bearish confirmation companion signal at that 96.8 top back around 20th 21st April..AIR also descended down steeply from $2.90 during the same period via it's H&S pattern.
BaaBaa, I rechecked my weekly chart..my FIB trend line was well off the high and low points..(wonder how that happened:confused:)... yep...re-set it and it says $2.34 as you said..

[Hoop]

I posted much earlier on the AIR thread about $XAL index chart's (http://stockcharts.com/h-sc/ui) slight correlation with AIR char (http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=NZ%3AAIR&time=8&startdate=1%2F4%2F1999&enddate=5%2F17%2F2016&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=50+200&uf=0&lf=4&lf2=1024&lf3=2&type=4&style=320&size=4&x=39&y=8&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11)t...It got very little attention/ ignored and was quickly swamped by the continued flood of rosy FA noises..A few days ago the AIR Management commented on the AIR share price drop being the effect of the Global airline market weakness (not our fault excuse;)).... It seems AIR drop is indirectly related to the global airline market weakness..not associated with QAN sudden drop as mentioned at the time by the media......QAN (http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=&symb=AU%3AQAN&x=14&y=5&time=8&startdate=1%2F4%2F1999&enddate=5%2F17%2F2016&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=50+200&uf=0&lf=4&lf2=1024&lf3=2&type=4&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11) drop can also be seen on the charts as being indirectly related to $XAL steep fall..it all happened at the same time as QAN negative announcement but the NZ / Oz media attentions were only focused on the home front and as the charts show it's reported logical outcome was not entirely correct.

Using the eye test with QAN/$XAL chart relationship ...in the past there doesn't seem to have any correlation with $XAL ..probably due to QAN's unique financial problems

Comparing AIR's relationship with $XAL .. Air seems to be leading by a day or two but keep an eye on the $XAL chart as any rise there would offer a high chance the rise will also be reflected back to AIR and possibly QAN

[Beagle]

Kudos to you for your call on AIR Hoop and thank you for being a gentleman and not saying I told you so and continuing to contribute for all our benifet.

[winner69]

Handy that part of the management incentives based on AIR share price relative to a global airline index

Our fault / not our fault but seems thy fcan't lose anyway

[Baa_Baa]

@Hoop, agree regarding horizontal support though I have the weekly 38.2 fib at $2.34, same as monthly (week of Jun8 2012 low to recent high.). The 10MA is right on $2.34 as well. The SP is still below at $2.26 though does seem to be settling (below the fib resistance). Too risky for me to play with dead cats.

@Hoop. How's the dead cat. Didn't bounce far, sort of a sideways splat cat? Close today at $2.23, on Friday's low last week below the Jun/Sept 2014 supports. After a morning of speculation by some that now was good time to buy, then the whole afternoon of steady decline. It's gut wrenching reading and watching, but quite the lesson!

Edit: someone slapped 64k on $2.25.8 to close after hours.

[Hoop]

Kudos to you for your call on AIR Hoop and thank you for being a gentleman and not saying I told you so and continuing to contribute for all our benifet.
This response is off topic but I think the kudos should be shared Roger..You've put a lot of effort into analysing AIR. I've used and valued your information that you have shared with all of us on ST It has been a great help in my decision making....We are both trying to make a better investment world for everyone out there...Sometimes the forum gets us down,, I think everyone of us goes through these phases....It's these low times when people should show their appreciation for the work and time you have put in...I know I do as I hold you in high respect and so do others on ST...Your ST reputation proves that and so it should...We all live in an imperfect world of share investing governed by the emotional behaviour of share investors and traders and we all have our high moments and low moments..Its unfortunate for many that AIR stocks has decided to behave badly, but that's how the market works...eh...


Handy that part of the management incentives based on AIR share price relative to a global airline index

Our fault / not our fault but seems thy fcan't lose anyway

Can't lose at the moment but I can imagine tough times for management when the global airline players decide not to play nicely...A good sensible management operating a company within a topped out cyclical environment which starts to see its Global players trying to cut each others throats must be challenging ..reminds me of the Aesops frog/scorpion fable...
frog= AIR management? scorpion = Global Airline Sector?..It's nature is to be forever cyclical?
The Scorpion and the Frog

A scorpion and a frog meet on the bank of a stream and the
scorpion asks the frog to carry him across on its back. The
frog asks, "How do I know you won't sting me?" The scorpion
says, "Because if I do, I will die too."

The frog is satisfied, and they set out, but in midstream,
the scorpion stings the frog. The frog feels the onset of
paralysis and starts to sink, knowing they both will drown,
but has just enough time to gasp "Why?"

Replies the scorpion: "Its my nature..."


@Hoop. How's the dead cat. Didn't bounce far, sort of a sideways splat cat? Close today at $2.23, on Friday's low last week below the Jun/Sept 2014 supports. After a morning of speculation by some that now was good time to buy, then the whole afternoon of steady decline. It's gut wrenching reading and watching, but quite the lesson!

Edit: someone slapped 64k on $2.25.8 to close after hours.
A splat cat..nice name..I like it :)
Europe down but trying to rally as I type and the Wall St animals are all nervous and restless within an eerie calm...not a good sign..
If Wall St technicals break $XAL probably will too..EgyptAir Flight Ms804 crashing won't help either..
That seems to be the way the bear market cycle works..It attacks your mind, creating disappointment after disappointment..everything seems to go against you..
Yes..Gut wrenching stuff

[Baa_Baa]

I remember @Hoop you posting the $XAL/AIR comparison chart illustrating the correlation of the index to our airline SP. It's only the early Jan -> mid Feb period, over the whole 4 year bull run from 2012, that the correlation broke when AIR went ballistic up to $3.20. I wonder if the big offshore investors in AIR that management spoke of to Roger yesterday saw that disconnection as a shorting (selling) opportunity? Currently AIR/$XAL have re-correlated though AIR does now look a bit oversold compared to the index performance.

[Beagle]

Thanks Hoop. I feel a bit splat today too. Market sure can be a tough mistress sometimes...

[Baa_Baa]

Now it is time for homage. AIR closed Friday 21 May $2.18. I have taken the liberty of editing some of the original content of the post (marked [...]) to focus on the analysis and price projection.

Well done!


AIR on Tuesday 26th April broke all sorts of TA indicators and chart patterns and triggered mass sell signals when it fell below $2.80..To a TA investor mass sell signals are serious..the discipline screams out "SELL" [...]

Ok below is a AIR chart stripped of all its TA layers except for the H&S Pattern...It is a great textbook example of a chart pattern which is the most reliable of all chart patterns..once the H&S pattern is completed (when the breakout occurs) there is a 96% chance the shareprice will fall more than 5%.. [...]

Xerof has a target price of 2.15 [the post appears to have been deleted but is quoted] I guess those calculations where using highs/lows..My chart calculations is using closing day prices...there's no right or wrong here as the target price.

Of more complexity when other patterns and TA incators are added in as chart layers we can see possible supports on the way down towards 2.19 target price which would affect the 46% odds of the theoretical happening...But I will leave the more complex stuff to another day


http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2029042016%20HampS.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2029042016%20HampS.png.html)

[winner69]

What happens now with these head and shoulder patterns

Does the price now fall to hands/wrist levels?

[Baa_Baa]

What happens now with these head and shoulder patterns

Does the price now fall to hands/wrist levels?

Refer post #116 for the probability stats; also @Hoops good work.

[winner69]

Refer post #116 for the probability stats; also @Hoops good work.

So that table in post #116 suggests little chance of the share price going sub 200?

[Xerof]

What happens now with these head and shoulder patterns

Does the price now fall to hands/wrist levels?

W69, there is no definitive new event expected after a H&S triggers, and meets it's 'measured' target, which in my mind it has done, by coming to within a cats whisker of my 2.15 target on Friday. Friday close was again just awful BTW

The only thing to be noted about a perfectly formed H&S completion, is that it signifies a major trend change. AIR has clearly broken it's long uptrend, and as such should now be treated as being in a downtrend, until further notice.

Just have to watch for signs of support, which could come Monday, next week, next month or next century

I am watching for an entry point, as I like the Company, but am VERY patient

If you want another example of a H&S, PEB completed an INVERSE one a short while ago, confirming completion of it's downtrend. Since then, it has simply marked time, as nothing inspirational either way has been seen.

[Hoop]

So that table in post #116 suggests little chance of the share price going sub 200?

Xerof...quote...".. AIR has clearly broken it's long uptrend, and as such should now be treated as being in a downtrend, until further notice.
Just have to watch for signs of support, which could come Monday, next week, next month or next century.."

How lucky do you feel?
Nearly a flip of a coin odds it will not break $2.00 ...that's if you are lucky and beat the odds

Neckline break (closing prices) = $2.73...only a month ago!!

Decline (%)............................ Bull Market... Bear Market
5 (breakeven)..>$2.59..................4%.............. 1%
10 ..................$2.45................ 15%.............. 5%
15 ..................$2.32.................35% .............17%
20 ..................$2.18................ 54% ............33%
25 ..................$2.04.................68% .............49%
30...................$1.91.................78% .............63%
35 ..................$1.77.................86% ............ 71%
50 ..................$1.36................ 97% ............ 93%
75 ..................$0.68.............. 100% ........... 100%
Over 75..........<$0.68...............100% ........... 100%

EDIT: currently at 209.5c down 8.5c -3.9%

[heisenberg]

What sort of drop in share price do you all tend to use as a stop loss sell point? 10% drop? 15%?

[Beagle]

Long term support at $1.90 isn't there Hoop ?

As mentioned on the AIR thread the company has bought back its own shares before when below NTA, (projected at 30 June 2016 to be $2.05 - per 4traders)

What I am suggesting is there could be a fair bit of money behind that long term support line over the medium term and any temporary drop below that might represent a real opportunity for the brave.

Price is starting to look silly when compared with QAN who are earning at the same rate and consensus price target $4.49. Agreed technical's look absolutely shocking...everyone is wondering where's the bottom so I guess the purpose of this post is to probe that question.

[stoploss]

What sort of drop in share price do you all tend to use as a stop loss sell point? 10% drop? 15%?

I find 10 % in NZ far too small - as with the lack of liquidity in a lot of stocks you get taken out of the game too easily .

[Hoop]

Long term support at $1.90 isn't there Hoop ?

As mentioned on the AIR thread the company has bought back its own shares before when below NTA, (projected at 30 June 2016 to be $2.05 - per 4traders)

What I am suggesting is there could be a fair bit of money behind that long term support line over the medium term and any temporary drop below that might represent a real opportunity for the brave.

Price is starting to look silly when compared with QAN who are earning at the same rate and consensus price target $4.49. Agreed technicals look absolutely shocking...everyone is wondering where's the bottom so I guess the purpose of this post is to probe that question.

Hi Roger
Over the many years of share investing I've learn't (burn't:() not to think of any major market correction as silly..Often Mr Market has a good reason..and the media (e.g broker reports) are lagging indicators which often publishes the news too late...When using TA, I don't factor in broker reports.

Why??....My old FBU posted chart (http://www.sharetrader.co.nz/showthread.php?5170-FBU-Chart/page65&highlight=fbu)..notice the brokers overestimated prices on the way down and underestimates the prices on the way up...this is one of many examples..
Therefore..knowing this above example does happen often..one should not use recent past experience bias and totally dismiss the possibility that Forbar's Air price could be too low..the lag example could mean the Forbars price is too high.
There has been research done about this kind of thing about perception bias and valuations..Winner69 and I mentioned it a few year back but I can't recall where abouts on the forum


....Winner we wont dwell on Macquaries 5.94 price will we ;)

http://i458.photobucket.com/albums/qq306/Hoop_1/FBU10102012.png

I've got AIR back on the watchlist...that's all...

Yes support for AIR at ~$1.90 and also at ~$1.80..

When the market experiences a sudden major correction there is a vibration event (series of overcorrecting events) Market physics stuff...this is the situation when investor (animal survival instinct) behaviour should be tested with behavioural indicators such as the Fibonacci Retractment which has seen 38.2% ($2.34) a goneburger and the next psychological point is 61.8% at around $1.80..(50% is not a Fibonacci ratio)....

...but as Xerof says..AIR could create a support anywhere with any time frame...some people (if enough of them and / or big enough to make a difference) can suddenly buy in and trigger buy signals , TA can only "best guess" where not when...There are psychological $2.05 and $2.00 points to consider as well...

[Beagle]

Thanks Hoop, I appreciate your thoughts. It's also good to be holding several stocks which are a great example of TA in terms of letting your profits run including SCL, CVT and SUM and I was pleased to follow KW's advice and your superb TA skills and get out when NZR broke down through its 100 day MA at $3.60. A long as I have more winners than losers I can live to battle another day, by the way have you got a spare airsick bag I could use, mine is full :)

[Hoop]

Using the hourly chart (http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=NZ%3Aair&time=18&startdate=1%2F4%2F1999&enddate=5%2F26%2F2016&freq=8&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=5&maval=20+50&uf=8&lf=1&lf2=4&lf3=1024&type=4&style=320&size=4&x=48&y=6&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11) ..AIR fired off short term buy signals for the first time in ages yesterday afternoon..$2.06 was the start of it...
Up to 2.14 early today and since hesitated at the short term resistance conjunction (2.15/2.16 from the splat cat bounce and the EMA 50 (period)..

EDIT: We have seen many people buying into this downtrend trying to catch the falling dagger..up to yesterday afternoon there where no buy signals at all during this falling event...Playing around with short term indicators are risky gadgets for the longer term investor...
However if one is compelled by greed and must buy in, technically speaking yesterday and today AIR is showing it's "best" form since the start of the fall..still a very risky play for the inexperienced

Disc: have no Air shares

[Baa_Baa]

[...] However if one is compelled by greed and must buy in, technically speaking yesterday and today AIR is showing it's "best" form since the start of the fall..still a very risky play for the inexperienced [...]

Illustrating the risks and opportunity:

Daily chart log scale. Two days up isn't a trend, though for the emboldened, an open and close day breakout on Friday from the very steep descending trend line, will be encouraging. If the SP continues up now with higher highs and higher lows, one can gauge the timing and risks of entry to suit their tolerances.

8075

Weekly chart log scale. The long tailed red candle indicates the possible reversion from bears to bulls in control. The precise reason for support at $2.02 is unclear except being around the 50% not-a-fib retrace of the 4-year bull trend(!) and approaching round number support at $2.00.
8074

Whether this is a splat cat bounce or not remains to be seen. Any entry around the current SP could be complemented by very tight stops adjusted upwards as/if the price continues up.

DYOR, JMHO.

[Xerof]

8080

I bought AIR this morning, after much internal debate over price action. Whilst the 'pin bar' to 2.02 showed no rejection on the day, 2.02 was hit on the close of the session. Next day provided good support and if I combine two days trading, I get my pin-bar. So I waited an extra day to confirm the strength of buying, which was confirmed by Friday close.

[Hoop]

got partially in yesterday ...:(

[Beagle]

got partially in yesterday ...:(

Seems the splat cat's (dog's ?), tail is about to wag.

[Hoop]

Seems the splat cat's (dog's ?), tail is about to wag.

Hmmm...hope so as I filled the rest of my order on this lunchtime rally breather..a lot higher than I wanted to be..

It's a worry the rally petered out today on the $2.30 (2 year old resistance) and also the $2.31 (23.6% Fib)..the Fibs are in play as this rally is instinct buying behaviour off a big drop..

If AIR stops at $2.31 it will be a TA disappointment...AIR is technically a Bear so beware of sucker rallies and DCB's...DCB average a 30% rise ($2.65) or Fib 61.8% ($2.79)..IMHO..$2.79 seems a bridge too far at the moment as there is strong resistance at $2.70..
However AIR has to get passed $2.30 first .. then a minor resistance at $2.40... and the big hurdle resistance line at 2.50 also containing the 38.2% Fib ($2.49) (psychological)..

Interesting longer term about Virgin..if some realised value is returned to the shareholder it could reinforce the bear cycle as the shareprice will fall back at ex -div

[Baa_Baa]

The gap open Tuesday and shooting star daily candle suggests reversal. Watch for a lower open as a sell trigger, or tight stops.

[cyclist]

Hmmm...hope so as I filled the rest of my order on this lunchtime rally breather..

First time I have ever seen you using hope as a strategy Hoop ;)

[Hoop]

First time I have ever seen you using hope as a strategy Hoop ;)
Hmmm.....my effects from recent mistimed buy ins........same type of hope as calling on divine powers to get your golf ball into the hole from one metre away when suffering the putting yips.


The gap open Tuesday and shooting star daily candle suggests reversal. Watch for a lower open as a sell trigger, or tight stops.
A bit ahead of yourself aren't you BaaBaa??..One only knows it's a shooting star after the following day... a bit like shutting the stable door after the horses have bolted...eh? A couple of hours into trading shows it's not a shooting star..

However, it's close to a gravestone and I hate them about as much as shooting stars..although I'm learn't not to be a daily candlestick watcher..
Like every other indicator, they should only be used as confirmation...That means using more than one (preferably 5 or 6) for decision making

Even though AIR got to a high of 229 up +4c earlier today, the technicals looked even then to be weakening..however remember...the short term indicators can swing around in a matter of hours or minutes..Air is in it's cyclical behavioural best at the moment...Volatile!!...that makes it a dangerous stock to play with...currently flat at 2.25

[Hoop]

now swinging down ....2.24c down 1c

Live daily chart ...so refer back to this post as the chart refreshes every 20 minutes
http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=NZ%3aAIR&uf=8&type=4&size=4&sid=964355&style=320&freq=1&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=5&rand=1499162921&compidx=aaaaa%3a0&ma=2&maval=20%2050&lf=1024&lf2=32&lf3=4&height=981&width=1045&mocktick=1

[Baa_Baa]

... A bit ahead of yourself aren't you BaaBaa??..One only knows it's a shooting star after the following day... a bit like shutting the stable door after the horses have bolted...eh? A couple of hours into trading shows it's not a shooting star..
...

Tuesday's candle by itself looks to me to be a shooting star candle on a gap up, I agree though that the reversal would have been signalled by a lower open today, which didn't happen. Nevertheless the reversal seems to trying its best to be in play at this moment in time. 2:12pm

[Hoop]

.... Nevertheless the reversal seems to trying its best to be in play at this moment in time. 2:12pm
Yep..agree....the TA and candles are showing that downward pressure

[Xerof]

I bought AIR this morning, after much internal debate over price action. Whilst the 'pin bar' to 2.02 showed no rejection on the day, 2.02 was hit on the close of the session. Next day provided good support and if I combine two days trading, I get my pin-bar. So I waited an extra day to confirm the strength of buying, which was confirmed by Friday close.

Coming together nicely since entry on 30 May - AIR has put in a higher low for the first time since breaking, then retesting the very steep downtrend line. A higher high on a closing basis anywhere above 2.31 would be gratefully accepted as a fruitful development.

Of course, a stop level can now be raised to 'sell after a close below 2.13', instead of 'sell after a close below 2.02'

[Hoop]

Coming together nicely since entry on 30 May - AIR has put in a higher low for the first time since breaking, then retesting the very steep downtrend line. A higher high on a closing basis anywhere above 2.31 would be gratefully accepted as a fruitful development.

Of course, a stop level can now be raised to 'sell after a close below 2.13', instead of 'sell after a close below 2.02'
Yes ..AIR seems to be trying to create an uptrend..A close today above the current $2.24 price will see a closing higher high price to go with the already formed closing higher low.. (DOW Theory)
Disc..Have AIR shares

[Xerof]

Oooh, yes, Hoop you are correct to point out the closing high to be surpassed is indeed 224 - my bad. The hurdle therefore is less of a task than I thought :t_up:

of course it needn't be today, but I'd take it

[Beagle]

Closing on its low for the day at $2.22 wasn't the sort of response to the VAH sale one might have hoped for.

[Baa_Baa]

Closing on its low for the day at $2.22 wasn't the sort of response to the VAH sale one might have hoped for.

Interesting how it played on investor sentiment, perhaps people trying to work out the difference between getting mostly out of VAH at a large loss, versus speculation that a special divvy will be paid.

The chart daily candle shows a classic gap up open on speculation, then turned away at exactly the 23.6% fib retrace and long term support (now resistance) and sell off during the day as the news is digested, to close on the day low price, leaving a small gap from the day previous. That's not the sort of price action to give confidence of a positive follow through on Monday.

Short term support may be found on the steep rising trend line around 2.18 (below that 2.13). If that happened a short term rising pennant may have formed with resistance at 2.26.

8103

[Hoop]

Closing on its low for the day at $2.22 wasn't the sort of response to the VAH sale one might have hoped for.

Overall..Up 5c for the day (2.3%) is good..late selling is suspect..
AIR seems to be affected by Global airline index behaviour and XAL tanked Friday as did Wall St in general..that's not good for for AIR come Monday...but as Xerof points out there are rising low points at the moment so hopefully the next one will be above the $2.13 level..


An interesting article on Stockcharts yesterday involving Richard Wyckoff's work...The author Bruce Fraser applies Wyckoff's power charting to the Dow Jones US Airline Index


(http://stockcharts.com/articles/wyckoff/2016/06/the-unfriendly-skies.html)

[Hoop]

Interesting how it played on investor sentiment, perhaps people trying to work out the difference between getting mostly out of VAH at a large loss, versus speculation that a special divvy will be paid.

The chart daily candle shows a classic gap up open on speculation, then turned away at exactly the 23.6% fib retrace and long term support (now resistance) and sell off during the day as the news is digested, to close on the day low price, leaving a small gap from the day previous. That's not the sort of price action to give confidence of a positive follow through on Monday.

Short term support may be found on the steep rising trend line around 2.18 (below that 2.13). If that happened a short term rising pennant may have formed with resistance at 2.26.

Hmmm..yes..that Fib coming into play like that suggests that announcement triggered an instinctive trading behaviour.... sometimes instinctive trading isn't built around rationality...With time we will find out if this possible up trend has any substance....Have to remind oneself that this is an attempted up trend inside Bear territory

[winner69]

XAL down 2.3% overnight - that's some drop

[Baa_Baa]

That's not the sort of price action to give confidence of a positive follow through on Monday.

Short term support may be found on the steep rising trend line around 2.18 (below that 2.13).

Close today Monday, $2.17. Let's see if that rising ST trend line holds tomorrow. $XAL overnight will provide clues as the correlation seems intact.

[winner69]

Close today Monday, $2.17. Let's see if that rising ST trend line holds tomorrow. $XAL overnight will provide clues as the correlation seems intact.

Hope that correlation breaks down today .....else another 6 cents fall for AIR

[Baa_Baa]

Hope that correlation breaks down today .....else another 6 cents fall for AIR

Close but no cigar. 9 cents down today, 2.13 did offer support for about 2 hours but broke down to close $2.08. Some have proffered up 2.05 as support but I'd factor in the recent low of $2.02. If it breaks that, head for the hills esp if $XAL and the Broads are leading it down. AIR's chart is mean, nasty and behaving just like the Bear it is at the moment.

[Hoop]

Got Stopped out of AIR at 2.11 yesterday took a -8% loss...

Disc: Have no AIR

[Hoop]

Load of the proverbial that so called correlation anyway

Last 3 months XAL down a tad but AIR down 25%

Maybe XAL trying to catch up?

https://au.finance.yahoo.com/q/bc?t=3m&s=%5EXAL&l=on&z=l&q=l&c=AIR.NZ%2C+&ql=1



You obfuscating the point, the correlation is not in terms of 'percentage' it is simply in terms of 'direction' (which is currently down) and $XAL is a leading indicator when there is correlation. You're right though, $XAL fell further overnight and broke down through medium term support, next supports at the Feb levels.

The reason $XAL has relevance is that large offshore holders of AIR are likely to also invest in other airlines (within the Airlines Index) and this influences decisions about portfolio weightings to the sector and in turn flows into buy/sell decisions on individual airline stocks.




Sorry to obfuscating there baabaa

Run some numbers over XAL and AIR - daily changes in each over the last 12 months

Conclusion - there is little correlation between the two (0.12) and that other factors (not how XAL is doing) mainly drive the AIR share price

Note your comment re 'direction' but i think that only applies over longer time periods

Hmmm..If the Airline industry cycle has turned it seems XAL is a leading indicator

http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%20XAL%2015062016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%20XAL%2015062016.png.html)

[winner69]

Hoop - we probably talking cross purposes or sometning

Me saying that there is a low correlation between period changes in price of XAL and AIR and baabaa and yourself talking direction

Maths says correlation ~0.1 for daily and weekly price movements of each (over yhevlast year) increasing to about ~0.3 for monthly price changes (last 10 years). These numbers are low, and even on a monthly basis say there is a low correlation in price movements between the two. Interesting over the last 142 momths there have been 56 months (more than a 1/3) where AIR and XAL have gone in different directions.

As you would expect the longer the timeframe the correlation gets stronger. On an annual basis the correlation is ~0.6 and except for lat year both have moved in the same direction

Your comparison chart is a good one - it does show that direction is generally the same and that change of direction needs to be noted

The discussion came about from daily movements in AIR and that they seemed to follow XAL (maths would say otherwise). You have pointed out by your chart the importance of following longer term trends. Different discussions - yes?

Whatever - AIR on a roll today - wonder why?

[Hoop]

Hoop - we probably talking cross purposes or sometning

Me saying that there is a low correlation between period changes in price of XAL and AIR and baabaa and yourself talking direction

Maths says correlation ~0.1 for daily and weekly price movements of each (over yhevlast year) increasing to about ~0.3 for monthly price changes (last 10 years). These numbers are low, and even on a monthly basis say there is a low correlation in price movements between the two. Interesting over the last 142 momths there have been 56 months (more than a 1/3) where AIR and XAL have gone in different directions.

As you would expect the longer the timeframe the correlation gets stronger. On an annual basis the correlation is ~0.6 and except for lat year both have moved in the same direction

Your comparison chart is a good one - it does show that direction is generally the same and that change of direction needs to be noted

The discussion came about from daily movements in AIR and that they seemed to follow XAL (maths would say otherwise). You have pointed out by your chart the importance of following longer term trends. Different discussions - yes?

Whatever - AIR on a roll today - wonder why?

Different discussions - yes?...yes

AIR on a roll today - wonder why?...I'll take the credit on that one :)...I exited it at 2.11 and caused it to rise...:(

[Baa_Baa]

Interesting, two Shooting Star daily candles (reversal signals) on Tues May 31 and Thur Jun 16, both gap open, both followed the next day by gap close drops.

$2.07 close Friday 17 June brings the $2.02 support into play again. There's no significant technical support below that until Aug 2014 low $1.87 (weak) and Oct 2014 low $1.75 (strong).

This could get really ugly if the $2.02 support breaks down then a dive to technical support below could happen relatively quickly. Conversely a bounce here or before $2.02 support would signal a double bottom indicating a reversal probability.

On balance it looks more bearish than bullish right now. JMHO, best to have eyes on and fingers on the trigger.

[Baa_Baa]

Monthly Chart. Mucking around to see if there's any symmetry in the peaks and troughs and behold there is a short cycle marking very very closely the medium term turning points, and the long cycle peak to peak. The previous short cycle seems to be a reversal which says to me that the current cycle will be down not up. Probably just making it up as I go but there is a remarkable symmetry. Note also those 10/20 month MA crossovers look reasonably effective 'get in, get out' signals and correlate fairly closely to the short cycle. Anyway, see what you think of this:

8115

JMHO, DYODD.

[couta1]

Tossing a coin would be at least as accurate a method of determining where the Air share price is heading compared to TA methinks and a whole lot simpler. PS-Fridays drop to $2.07 on close was caused by a few nervous big boys selling out due to the Brexit situation and not specific to Air. PPS-Expect more turbulence next week,up or down? get that coin out, probably both so heads and tails are both winners.

[Baa_Baa]

Tossing a coin would be at least as accurate a method of determining where the Air share price is heading compared to TA methinks and a whole lot simpler. PS-Fridays drop to $2.07 on close was caused by a few nervous big boys selling out due to the Brexit situation and not specific to Air. PPS-Expect more turbulence next week,up or down? get that coin out, probably both so heads and tails are both winners.

A predictably vacuous and insensitive comment, intruding on the TA 'time entries and exits' thread with nothing to contribute except derisive nonsense and entirely speculative gross generalisations that have nothing to do with technical analysis. The reason we don't discuss TA on the AIR thread is precisely due to inane responses from the few who have no ability or interest in developing their skills to augment their share investing or trading decisions. If you can't contribute on topic, please don't say anything at all.

[couta1]

Come on Baa, you've made plenty of TA comments over on the Air thread, you seem to have a morbid fascination with the stock. By the way I do use basic TA indicators but as primarily a long term FA investor in stocks like Air, they are only of minor significance. PS- Above post did contain a touch of humour.

[Joshuatree]

Interesting, two Shooting Star daily candles (reversal signals) on Tues May 31 and Thur Jun 16, both gap open, both followed the next day by gap close drops.

$2.07 close Friday 17 June brings the $2.02 support into play again. There'no significant technical support below that until Aug 2014 low $1.87 (weak) and Oct 2014 low $1.75 (strong).

This could get really ugly if the $2.02 support breaks down then a dive to technical support below could happen relatively quickly. Conversely a bounce here or before $2.02 support would signal a double bottom indicating a reversal probability.

On balance it looks more bearish than bullish right now. JMHO, best to have eyes on and fingers on the trigger.

Thanks Baa ; plenty of us who appreciate your's and Hoops, without emotion/ego, T/A posts on here although you tend to lose me at times as i like to keep it simple with a few M/A, vol indicators. The old buy and hold in the bottom drawer approach has been consigned to history for most stocks unfortunately; even now i find myself reverting to this faulty default setting and have to drop kick that redundant idea and more actively monitor my stocks. Being mindful of what we small investors are up against, tech wise, Insto's, bots etc helps and I'm thinking our days are prob numbered investing in this way; the odds will be so stacked against us soon enough.

[Baa_Baa]

Come on Baa, you've made plenty of TA comments over on the Air thread, you seem to have a morbid fascination with the stock. By the way I do use basic TA indicators but as primarily a long term FA investor in stocks like Air, they are only of minor significance. PS- Above post did contain a touch of humour.

Not anymore I don't, TA is not appreciated on the AIR thread, it is quickly cried down by the eternal optimists, and besides this is a civil egoless thread about TA entries and exits, not confined to AIR. It just happens that AIR is emerging as a very good example of a pending entry opportunity when the capitulation occurs, though it could be months away, maybe years and the price could be a heck of a lot lower, as AIR has shown with it's cyclical tendencies. As for "morbid fascination", whatever that means in this context, if you think closely monitoring a share for a buy-in price in a massive down trend is morbid, or perhaps you think unselfishly sharing my analysis is morbid, then plenty of others are patient enough to be fascinated as well, unlike some who leap at the slightest price weakness even in a confirmed downtrend and 4-year price trend breakdown. Because you like disclosure, here's a fess up .. I bought AIR 0.85 and sold 2.90. Long TA got me in and also got me out, it's working just fine thank you. I will buy it again when my TA says so. There was also no humour in your cynical post, just off topic rhetoric and direct attacks on the disciplines of TA and implied attack on the poster, as it immediately followed a shared cyclical analysis chart. The pot called the kettle black. It was not appreciated in the slightest. I doubt that you would stoop to an apology.

[couta1]

Baa Baa, I'm more than happy to apologize if I have caused offense however I think you have grossly over reacted to my original post and I'm not the only one to think so.As an aside I never looked at the cyclical analysis chart before posting.Perhaps if we both delete our posts that would solve the problem?

[workingdad]

Hi Baa, I appreciate the charts and input and hope you keep it up, its great learning from yourself and others and trying to apply in practice.

The pin for today not exactly the robust nature it started out at. Hopefully over the week some consolidation will come in as brexit settles and the comment you made on the bounce and double bottom comes into play.

Time will tell :)

[Baa_Baa]

Thanks JD and WD, one wonders from time to time whether it's worth the effort to share.

Nevertheless, AIR has built a (very) short term rising support trend line (daily chart), 5 days higher low/close from $2.02, and today bounced off that trend line to the obvious short term resistance $2.12 also the 10MA. The immediate significant price resistance (above) is at $2.27, support (below) is vaguely $2.07 and strong $2.02.

WD, your question on AIR about whether this is a new up trend, well that's not about price per se, it's more about risk thresholds imho. The mainstream indicators suggest the very beginning of an upswing from oversold, though even the very short MA's (10/30) are still above. Early days to pick a reversal.

News could change AIR either way and there's no shortage of direct and indirect news lately.

[workingdad]

Thanks for that Baa Baa, great commentary and insight. AIR certainly has had a battering. I think a lot of it will hinge on Brexit which by overnight markets seems to be pricing in them remaining. If that is the case removing the uncertainty clouding things of late may just result in AIR gaining some traction.

Its been interesting to follow and funnily enough some good learning in it for me. Didn't play it well to start but been a bit smarter with it lately albeit not without a touch of risk.

[RupertBear]

New to share trading so I apologise in advance for my stupid question, but what time period should I be looking at to apply moving averages please? One year, two years, five years? Am I correct that 50 and 200 are the best MA's to apply?? Sorry for my simplistic knowledge!

[Baa_Baa]

New to share trading so I apologise in advance for my stupid question, but what time period should I be looking at to apply moving averages please? One year, two years, five years? Am I correct that 50 and 200 are the best MA's to apply?? Sorry for my simplistic knowledge!

Perhaps you could start a 'Basic Technical Analysis' thread in the newbies corner, I'm sure people will be happy to help there. Most things you're likely to ask are covered in detail just by googling, for example .. google "Trading moving averages (https://www.google.co.nz/search?client=safari&rls=en&q=Trading+moving+averages&ie=UTF-8&oe=UTF-8&gfe_rd=cr&ei=3PZxV_LHA87N8gf0-ruYAQ)" and do some research. Investopedia.com, Stockcharts.com, Investing.com, Bigcharts.com ... all have a good mix of education, tutorials and / or free charting software.

[Mista_Trix]

New to share trading so I apologise in advance for my stupid question, but what time period should I be looking at to apply moving averages please? One year, two years, five years? Am I correct that 50 and 200 are the best MA's to apply?? Sorry for my simplistic knowledge!

Different time frames are used for different purposes and how quickly you want the information to trigger off predetermined exit and entry boundary lines.

There is no 'best', its more about your intention or predisposition. For example, you have described time frames that are more suited to an 'investors' horizon, 50 day Moving Average and 200 day moving average. These allow for quite a lot of movement and will be slow to give you buy or sell signals. If you use shorter MAs you will get quicker feedback from the market, but you may get pushed in and out of stocks more frequently - which if you're trading, is a good thing.

A good set of questions to ask yourself is - what is my time frame? When do I need the money? Am I an investor, or a trader? What is my personality like - will I jump at shadows, or will I be considered in what I'm doing regardless of the market? Will paper losses relate to sleepless nights? Am I good with extended periods of soft pressure (investing)? Or am I good with quick periods of short hard pressure (trading)? Would I rather be quickly 'in' and 'out' of stocks that might go negative for a while, or is that okay with me?

Personally, I tried trading and it wasn't really for me, I prefer investing but listening to long market forces - for me 50 and 200 MAs work really well. You'll see a couple of people with hard disciplines of TA only, while others combine a little bit of both TA and FA, and others again discount TA entirely as black magic.

Take a look at some companies you might be interested in investing in, go to a charting site and starting tinkering with the MA periods - how many times would you have been pushed in and out of a stock over say the last 1, 2, 5 years etc with different MA periods. This will help find the one that's right for you.

[RupertBear]

Thank you so much for your helpful replies. Much appreciated

[Zouga]

Hi I am interested in buying into ANZ and it looks as low as its been in a year however from a TA perspective I would be interested in your feedback. My own observation has been the re testing of support at $24 ish. Thanks.

[percy]

Keep your powder dry a little longer,as the SP is below both the 100 day EMA and the 200 day EMA.
ANZ,AX SP$22.79 100 day EMA $24.48,200 day EMA $25.61.
ANZ,NZ SP $23.78 100 day EMA $26.33 ,200 day EMA $27.70.
If you are really keen wait until the sp goes above the 100 day EMA before buying.

[Baa_Baa]

Hi I am interested in buying into ANZ and it looks as low as its been in a year however from a TA perspective I would be interested in your feedback. My own observation has been the re testing of support at $24 ish. Thanks.

ANZ is in a steep downtrend, very risky entry. That $24 support is a good observation, a double bottom right on the 61.8% fib retrace from the post-GFC lows in 2008! Watch for a bounce or a break down, one defines the risk the other defines the opportunity, it could go either way, wait for confirmation. The 200MA is fairly safe but it's a long way above here around $27.

jmho

[Beagle]

FWIW I agree with Baa Baa and Percy on ANZ. Banking stocks worldwide are under pressure because of Brexit and the fear of bank disruption within the Euro Zone. Both from a technical and fundamental perspective an investment in ANZ at this time would appear to carry a substantial amount of risk.

[Zouga]

Thanks to you all. I will wait patiently for an opportunity here

[Beagle]

Standard and Poors very recently placed all the Aussie banks on negative creditwatch. Chances of some downgrades are pretty good IMO.

Hoop - Would you like to share your updated thoughts on a TA basis on AIR's current situation ?

[Zouga]

I am also watching AIR with interest but am yet to be convinced in the uptrend. According to KWs strategy for buying AIR is still a risk but I would appreciate your feedback.

[Hoop]

Standard and Poors very recently placed all the Aussie banks on negative creditwatch. Chances of some downgrades are pretty good IMO.

Hoop - Would you like to share your updated thoughts on a TA basis on AIR's current situation ?


I am also watching AIR with interest but am yet to be convinced in the uptrend. According to KWs strategy for buying AIR is still a risk but I would appreciate your feedback.
Correct Zouga...there is no uptrend..there's been no higher high and no higher low...KW empathises MA200 line as a bull / bear cycle indicator...when a stock price breaks above the MA200 line that stock enters into a new bull market cycle..AIR needs to be above $2.70 at the moment to gain Bull Status...

AIR is a bear and as long as it stays a bear expect it to exhibit bear behaviour and feelings
..Rallies falter at a resistance level (Sucker/Relief)... followed by lower lows, it's not uncommon to experience some lows of the capitulating variety.
..Medium to long trend lines are down-sloping
..MA200 line is down-sloping.
..MACD spends more time below zero than above zero (above zero are sucker rallies)
..Investors experience the feeling of disappointment/frustration/ bewilderment... (fear only occurs during a capitulation event)
..Sudden change of mood behaviour e.g disappointing announcement during a rally.
..Good news seems to go unrewarded.
..When the stock finally looks like it's coming right the media publishes another round of bad news.
..Sudden bursts of irrational behaviour.

Roger..The chart below is not very inspiring..AIR has stopped it's steep descent and gone into a holding phase A descending triangle pattern has formed. These patterns are slightly bearish as 64% break below the pattern and 36% break above the pattern...External influences help the odds..such as global market rallies would increase the chances of a breakout above the pattern... The bad news is a descending triangle can act as a continuation pattern, which for AIR indicates the pause before the next phase downwards..

All in all the chart is in limbo at the moment...if AIR can close at $2.20 then there is a rosier picture because of the breakout but it really has to get above the $2.30 to become remotely exciting to a medium term TA buyer (higher high)...really needs to be over the $2.40 major resistance area..

AIR has a lot of TA and Charting hurdles to jump over...As usual the best TA buying in strategy is to wait for buy signals.

http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2011072016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2011072016.png.html)

[Beagle]

Thanks Hoop.

[Cool Bear]

thanks hoop for that chart. I am one of the guilty ones falling prey to the sucker rallies of late for AIR.

[Hoop]

thanks hoop for that chart. I am one of the guilty ones falling prey to the sucker rallies of late for AIR.

Me too...I expected the dead cat bounce off the 2.02 bottom to reach at least 2.40 was hoping for 2.50 to 2.70...it ended at 2.31 a couple of cents higher than my buy in.....so my 10% quick flick turned into a -4% quick flop...I was dabbling so it didn't wound me financially just wounded my pride:p

[Baa_Baa]

Me too...I expected the dead cat bounce off the 2.02 bottom to reach at least 2.40 was hoping for 2.50 to 2.70...it ended at 2.31 a couple of cents higher than my buy in.....so my 10% quick flick turned into a -4% quick flop...I was dabbling so it didn't wound me financially just wounded my pride:p

Probably some good upside for the brave and (lucky?) nimble traders even at $2.16 today, though for the slightly more conservative, that descending triangle and double bottom support says patience, wait, watch. My trusty weekly chart says close above $2.29 and confirmed is a decent entry. Could be all ****e though, who knows.

[workingdad]

Looking at the chart, isn't the 50 MA at 2.185? XAL up 4.5% overnight and oil prices outlook subdued as mentioned in the AIR thread, I am wondering if sentiment is starting to turn. Be interesting to see the EOY results and outlook but from my limited perspective I don't exactly see headwinds.....

8157

Bollinger bands

8161

Would the experts be able to take some time to educate myself and others. Is the Bollinger bands for AIR potentially showing a W pattern? If there was a break out at 2.25 could this be a predictor for a good recovery?

I enjoy reading the charts you guys put up and the analysis but wonder if the above is a consideration as well?

Thanks

[Hoop]

Probably some good upside for the brave and (lucky?) nimble traders even at $2.16 today, though for the slightly more conservative, that descending triangle and double bottom support says patience, wait, watch. My trusty weekly chart says close above $2.29 and confirmed is a decent entry. Could be all ****e though, who knows.

Hmmm..yeah..BaaBaa around the $2.29 breakout is positive...but there's a problem for chartist buying in here (2.31ish) and that is the major 2.40 resistance is only 4% up the road...Though about this last night and an alternative plan (higher risk/better reward) is to maybe buy in at the descending triangle upside breakout which could happen today or did it happen yesterday. (2.16-2.17 margin of error)...Wall St is surrounded in an aurora of investor bliss atm..so less risky bet for AIR to jump in now with tight stops?

XAL has broken upwards (Gapped up) It seems the sun has broken through the clouds and everyone in the Global airline sector has donned on their rosy glasses.

Hmmm.might have another dabble..

[Hoop]

Looking at the chart, isn't the 50 MA at 2.185? XAL up 4.5% overnight and oil prices outlook subdued as mentioned in the AIR thread, I am wondering if sentiment is starting to turn. Be interesting to see the EOY results and outlook but from my limited perspective I don't exactly see headwinds.....

8157

Bollinger bands

8161

Would the experts be able to take some time to educate myself and others. Is the Bollinger bands for AIR potentially showing a W pattern? If there was a break out at 2.25 could this be a predictor for a good recovery?

I enjoy reading the charts you guys put up and the analysis but wonder if the above is a consideration as well?

Thanks

There is headwinds..your 2.18 MA50 is a variable resistance line..My chart has a EMA50 of 2.236 so there is a lot of resistance sludge around... as I said previously AIR has a lot of work to do....however a big buyer or two would do the trick...NZ is a small market..
From a close inspection on my chart (3 month view) the bollinger bands yesterday widened a tad from the squeeze.

Bollinger bands tend to be price boundary lines but remember with volatility the BB lines act according..so you cant surmise yesterdays BB top line at 2.204 and say that today's price will hit and pause at 2.20 because if todays price rises so will the top BB line..ditto with a fall...but in saying that when a rally does start the price tends to hug the top BB line.

Moosie observed that it was common to see the first 3 days of a big rally hugging the top BB line then decelerating away ...often happens but not always the case as big upward markets corrections can see the price hugging the top BB line for many days

Also looking at the weekly chart (BaaBaa's favourite) it shows less distracting and often useless noise the EMA14 variable line is at 2.29..above this line signals a more conservative lower risk medium/long term buy signal.


Disc:...Probably jumped the gun but I'm back in this morning at 2.165....For readers benefit..My timing has been lousy this year..

[workingdad]

There is headwinds..your 2.18 MA50 is a variable resistance line..My chart has a EMA50 of 2.236 so there is a lot of resistance sludge around... as I said previously AIR has a lot of work to do....however a big buyer or two would do the trick...NZ is a small market..
From a close inspection on my chart (3 month view) the bollinger bands yesterday widened a tad from the squeeze.

Bollinger bands tend to be price boundary lines but remember with volatility the BB lines act according..so you cant surmise yesterdays BB top line at 2.204 and say that today's price will hit and pause at 2.20 because if todays price rises so will the top BB line..ditto with a fall...but in saying that when a rally does start the price tends to hug the top BB line.

Moosie observed that it was common to see the first 3 days of a big rally hugging the top BB line then decelerating away ...often happens but not always the case as big upward markets corrections can see the price hugging the top BB line for many days

Also looking at the weekly chart (BaaBaa's favourite) it shows less distracting and often useless noise the EMA14 variable line is at 2.29..above this line signals a more conservative lower risk medium/long term buy signal.


Disc:...Probably jumped the gun but I'm back in this morning at 2.165....For readers benefit..My timing has been lousy this year..


Thanks Hoop, yeah I think the not seeing headwinds was poorly worded, perhaps seeing less now than in May is a better way to put it and some of those they are not to the degree of significance they were back then.

Widening Bollinger bands are good and hopefully that continues and either way seeing the SP in the upper range of the Bollinger bands is a showing of strength I am pleased to see. Been a lot of sellers happy to take the 2.16 range but my thoughts are a lot of those took advantage of Brexit prices and banking some gains.

I hope this time works out better for you Hoop. I actually think last time should have too but having made the same mistake myself a couple of times my judgement hasn't exactly been without fault either but it does seem to be better the last month or so.

[Beagle]

Disc:...Probably jumped the gun but I'm back in this morning at 2.165....For readers benefit..My timing has been lousy this year..

Welcome back Hoop. I topped up on Monday at the same price. It simply doesn't make sense that most of the rest of the world's airline stocks including the close competition QAN are starting a recovery and AIR are doing jack, especially in the light of their exit from VAH and the pending special and final dividend. Sigh...It would really make for a nice day if AIR could match the 4.5% increase in the XAL index for once, (not holding my breath).

[workingdad]

This doesn't make any difference to me as I finished coming back in to AIR when it was in the post brexit sell down but still keen to learn about charts and finding AIR is a great share price to learn from. So....

Bollinger bands widening and SP outside upper band which can be the start of an upswing (or can be a sign of overbought - how to differentiate between these two is something that is after a trend one way or another I guess.

Now broken through 50 day MA.

A higher high will be a close at greater than 2.25 which I am not saying is today but it seems it is edging up day by day or is the higher high not based on a close price but an intra-day price?

MA 200 line is flattening out and almost about to start upwards.

What else should one be looking for?

Thanks

[Hoop]

I've posted a detailed CAV chart detailing the initial buy in (8 months ago) and the following accumulation opportunities on the CAV thread (http://www.sharetrader.co.nz/showthread.php?6332-Cavalier-cav&p=629880#post629880)
There is a steps up pattern Rally pause Rally Pause Rally..the pauses are throwbacks to the breakout price...How long this pattern continues is anyone's guess but be mindful that all patterns do end at some point in time..

[Hoop]

workingdad I just noticed your post ...I will reply when I get time unless someone beats me to it:)

[workingdad]

Thank you Hoop, things have changed a bit with AIR since then but if the 2.15 mark is the new higher low and it starts to recover again going past the 2.27 point it may be more meaningful :)

[Xerof]

I like to trade charts naked - google that WD, it's not what you think. :D

AIR - I alerted folks to the bearish Head and Shoulders formation a while ago, then called the bottom at 2.02, physically entering a position myself a day or 2 later. I recommended a stop level, but I'm naughty and don't follow my own protective recommendations, as I like the thrill of the chase. They are put in to save others from themselves if a disaster happens. Ever since then we have had noise, noise and more noise (in the price, not the thread), and unlike the take-out cups you get on airlines, I see a very nice Cup and Handle has formed on my naked daily. In usual circumstances, this should mean a decent rally.

You correctly observed the higher low at 2.15 - good work

[Baa_Baa]

@Xerof good spotting :cool: the C&H suggests a price target of about $2.54, depending on where one sees the neckline which has to breakout to confirm the pattern. That target is also the 50% fib retrace.

[winner69]

@Xerof good spotting :cool: the C&H suggests a price target of about $2.54, depending on where one sees the neckline which has to breakout to confirm the pattern. That target is also the 50% fib retrace.

250 is 50% retrace - whats the full retracement target?

[Hoop]

AIR has broken out..
Xerof..I.m not convinced this was a bona fide CwithH pattern...It could be lead in to a possible Bump and Run pattern (assumption)...There was a 5 month downtrend which had a 2 day rally (1 week on the weekly chart) ..is that considered long enough to be an uptrend into the start of this pattern?... One of the guidelines for this bullish continuation pattern is there has to be an established uptrend of at least 30% leading into the CwithH pattern...Also...often Chartists look for CwithH using a weekly chart then zoom in into a daily chart. On the AIR weekly chart it is hard to identify a CwithH pattern

To me (splitting hairs here) I think this is a CwithH look alike pattern which probably has similar trading behavioural attributes and outcomes so I shouldn't be too pedantic about it... so Xerof it's good enough for me...Analysing a target price for a look alike pattern?...Hmmm

Bullowski says a CwithH in a bull market environment (NZX50) is not great but reasonally reliable pattern. It has a low failure rate (5%) (<5% breakout rally) but has a poor history of reaching its target price...The breakout has a 42% of a throwback to the cup lip (so not good chance for me to enter again now as a profitable investment)..The percentage chance a true CwithH pattern has in meeting its target price [measure rhs cup lip from bottom of cup] of $2.51 is only 50%!!! ...

Why 50% probability meeting its target price ($2.51)???..

Looking at AIR chart there is a long term (20 month) resistance zone at $2.30/$2.40 with 6 touching points (sign of reasonable strength) and a long term (19 month) resistance line at $2.50 with 7 touching points and one gap..the gap is a powerful point and is also a warning area as this price area will in the future will have a higher probability of producing gap up or down events..

So..resistance areas do affect the price target performance..as will as other resistance lines e.g MA and down sloping trend lines

Bullkowski offers a better price target measurement which divides the TP measurement by the 50% probability figure...$2.39...This price has a 76% chance of being met....Notice this price is at AIR's resistance zone..

Note:.. Bullowski's stats are from the S&P500 analysis
Disc: own none

[Baa_Baa]

250 is 50% retrace - whats the full retracement target?

Apr 11th intra-day high of $3.05

[kiora]

AIR has broken out..
Xerof..I.m not convinced this was a bona fide CwithH pattern...It could be lead in to a possible Bump and Run pattern (assumption)...There was a 5 month downtrend which had a 2 day rally (1 week on the weekly chart) ..is that considered long enough to be an uptrend into the start of this pattern?... One of the guidelines for this bullish continuation pattern is there has to be an established uptrend of at least 30% leading into the CwithH pattern...Also...often Chartists look for CwithH using a weekly chart then zoom in into a daily chart. On the AIR weekly chart it is hard to identify a CwithH pattern

To me (splitting hairs here) I think this is a CwithH look alike pattern which probably has similar trading behavioural attributes and outcomes so I shouldn't be too pedantic about it... so Xerof it's good enough for me...Analysing a target price for a look alike pattern?...Hmmm

Bullowski says a CwithH in a bull market environment (NZX50) is not great but reasonally reliable pattern. It has a low failure rate (5%) (<5% breakout rally) but has a poor history of reaching its target price...The breakout has a 42% of a throwback to the cup lip (so not good chance for me to enter again now as a profitable investment)..The percentage chance a true CwithH pattern has in meeting its target price [measure rhs cup lip from bottom of cup] of $2.51 is only 50%!!! ...

Why 50% probability meeting its target price ($2.51)???..

Looking at AIR chart there is a long term (20 month) resistance zone at $2.30/$2.40 with 6 touching points (sign of reasonable strength) and a long term (19 month) resistance line at $2.50 with 7 touching points and one gap..the gap is a powerful point and is also a warning area as this price area will in the future will have a higher probability of producing gap up or down events..

So..resistance areas do affect the price target performance..as will as other resistance lines e.g MA and down sloping trend lines

Bullkowski offers a better price target measurement which divides the TP measurement by the 50% probability figure...$2.39...This price has a 76% chance of being met....Notice this price is at AIR's resistance zone..

Note:.. Bullowski's stats are from the S&P500 analysis
Disc: own none

Where you out at $2.30?

[Hoop]

Where you out at $2.30?

No... My TA threw me out at $2.175...I used the more sensitive TA due to AIR being so volatile and on the wrong end of the cycle top..I used the "one sniff of weakness and I'm gone" strategy...It didn't work out but I'm not feeling sad about it, as I fell on my feet ... my AIR funds went into CAV accumulation..a far better short term return so far.

[kiora]

No... My TA threw me out at $2.175...I used the more sensitive TA due to AIR being so volatile and on the wrong end of the cycle top..I used the "one sniff of weakness and I'm gone" strategy...It didn't work out but I'm not feeling sad about it, as I fell on my feet ... my AIR funds went into CAV accumulation..a far better short term return so far.

Well done.Good strategy

[Hoop]

Well done.Good strategy
I don't know about the well done, but thanks anyway..
I'm starting to act like a rabbit investor ..a car backfire and I'm off down the rabbit hole..

[JBmurc]

Just been looking over my shares I sold over last 6-10 months etc ... to focus just two companies that I would do far better over a shorter timeframe than others has really cost me as one did move strongly the other has gone down ...I'm sure I'm not the only one kicking themselves for not holding many shares for longer in 15/16 ... been a boom year for the sectors I follow>>

first and last year I just hold 2 shares ....min 4 from 2017+

PGO-sold 2.3c now 14c .
ATC-sold 10c now 16c ..
CAV- sold .6c now 1.4c
PHK-sold 3.5c now 10c
TRY-sold 43c now 53c
MGX-sold 21c now 29.5c


simply gutted >>>>>>only one company I sold and glad to have was ACG saving me 20% loss in value...

funny as a tax paid trader I haven't traded since early march (the least in several years) .....just holding two shares waiting on the big pay day which is coming :)

[kiora]

I don't know about the well done, but thanks anyway..
I'm starting to act like a rabbit investor ..a car backfire and I'm off down the rabbit hole..

Hmm,yes I know what you mean.I got nervous & reviewed portfolio back at beginning of year, sold some stocks that are up 25 % & 40% since :( More growth orientated companies where added to the portfolio and the portfolio that was retained is up 30% since January and bank OD is looking healthy.I didn't sell any during GFC and the portfolio went down around 75% ouch but felt I could ride it out as portfolio was made up of financially strong companies.Well in hind sight it may appear a dumb strategy but share portfolio now up 150% from peak value before GFC (2008?) .I find it difficult to trade successfully as it is difficult to time selling & repurchasing.I suspect there needs to be a 20% movement up & down in a share price, to ensure trading is successful over the long term for me .Over 30+ yrs of investing has hardened me to the volatility in my portfolio particularly now when interest & inflation are so low but where to from here? I am following your posts with interest to try and work out if I can improve on my investment strategy with consideration to the time required and nerves ;)
Interesting to me is Ratkins portfolio from what I can deduce,(Health & retirement orientated) is performing 10% better than mine but mine is closing the gap in the last few months having invested in growth orientated companies but I'm very wary as any risk off market period my portfolio is likely to take a hit.

[workingdad]

I like to trade charts naked - google that WD, it's not what you think. :D

AIR - I alerted folks to the bearish Head and Shoulders formation a while ago, then called the bottom at 2.02, physically entering a position myself a day or 2 later. I recommended a stop level, but I'm naughty and don't follow my own protective recommendations, as I like the thrill of the chase. They are put in to save others from themselves if a disaster happens. Ever since then we have had noise, noise and more noise (in the price, not the thread), and unlike the take-out cups you get on airlines, I see a very nice Cup and Handle has formed on my naked daily. In usual circumstances, this should mean a decent rally.

You correctly observed the higher low at 2.15 - good work

Yeah I can think of other things to do naked that would be much more fun than that but being married means I don't experience them as often as I would like :scared:

Reading all the comments in the last few days really details the complexities of charts and how long it would take to get a handle on them (no pun intended).

Looking ahead I think its stating the obvious but SP will be dictated by the EOY results, outlook and associated special divvy but in the interim, I would be surprised if there is another drop and predict it holding in the current range and perhaps even track upwards bit by bit as it gets closer.

[Snow Leopard]

...I would be surprised if there is another drop and predict it holding in the current range and perhaps even track upwards bit by bit as it gets closer.

If there is one thing you learn with experience it is that anything can happen.

So, be prepared to be surprised.

"I don't make mistakes. I make prophecies which immediately turn out to be wrong."
― Murray Walker


https://chemtrailsnorthnz.files.wordpress.com/2012/05/air_nz_allblacks.jpg
Not a black swan.

Best Wishes
Paper Tiger

[workingdad]

Fair comment PT - less likely probably a better way to word it - I wouldn't understand why anyone would sell so close to results time when we have a fairly decent indication of a special and with that a lift in SP. Just my thoughts of course.

[Snow Leopard]

Fair comment PT - less likely probably a better way to word it - I wouldn't understand why anyone would sell so close to results time when we have a fairly decent indication of a special and with that a lift in SP. Just my thoughts of course.

Proper Technical Analysis never asks why did that happen, but should tell you what to do about it.

Best Wishes
Paper Tiger

Disc: I wouldn't understand why anyone would invest in AIR in the first place :confused:

[workingdad]

Proper Technical Analysis never asks why did that happen, but should tell you what to do about it.

Best Wishes
Paper Tiger

Disc: I wouldn't understand why anyone would invest in AIR in the first place :confused:

Probably the same reason they invest in any share - to make money. There are winners and losers in most out there, I caught the falling knife a couple of times on the way down with stops in place (after the first decent drop that is) but played a smarter game from there trading in and out most days by selling first thing in the morning and buying on close and then scored more at 2.07 which I held then the BREXIT thing topped up at 2.035 and then more again at 2.11 and in the green overall. Smarter people bought up in the low 2 dollar range and now turned around 10 to 15% gain in a matter of weeks.

Why wouldn't anyone invest :confused:

[whipit]

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).



I saw this Maersk trend this morning and it reminded me of this post. I've been wanting to contribute a little here, as I've gained a lot. So I thought I'd share :-)

Looks to have broken out of the 12 month down trend
50 day just about to cross the 200 day MA
MACD positive

My only concern is it looks a little over bought. So I'll watch it for the next couple of days to see if it retraces to the 9585 mark to get it. I'll report back how it goes, or if I change my mind :-)

*apologies it's from a market miles away

8255

[Joshuatree]

The gift that keeps on giving. Although I'm a slow learner with this at times esp with the selling..


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)
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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)

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Another great example is SIV - entry point is end of February ($5.90 - $6.28)
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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.
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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.