Using TA to time entries and exits

[Hoop]

Chart below was drawn on the 26th August and sent to 3 ST members who PMed me confirming if my charts like theirs were triggering a sell signal..my reply was my chart below is saying the announcement drop is probably a short term buy opportunity and the opportunity window is starting to close with DYO analyses disclosure

The old chart is showing some interesting stuff.....
Hmmm...bounced of 178.5 this morning...The trading price (TP) estimated was 178..Hmmm a short term buy?..I wonder if my drawn in support (a confirmed neck line??) at 180 should be lowered to 178...The depth data says no as there is weak support now at 180 and also 170 ,175..This depth behaviour could be fickle ... looks like small investor nibbling around emotional price levels (the 5c multiples) rather than analyzed price figures...probably a sign todays AIR market is currently in limbo..

Disc: staying away..not buying

[Hoop]

Its too close to call yet if there has been a Complex Head / single shoulder pattern formed ...If the neck line (~1.80) has broken (H&S pattern formed), that's bad news..

The price bouncing off 1.785 this morning is a positive sign...Price/volume bars shows weak support though..and it doesn't show any window of opportunity to buy in at this stage (Mon 12.43pm)..

Update:..12.49pm...That 1.805 leveling off looks like a resistance forming..the Price/volume bars are suggesting this also. ...Hmmm the thoughts of a 1.80 neckline is a worry

Self updating Interactive 5day 15min period chart below (20 min delay)

[Hoop]

Hmmm...bounced of 178.5 this morning...The trading price (TP) estimated was 178..Hmmm a short term buy?
The self dating chart above has showed 1.78 as the bottom and so a new weak support I still favour the 1.80 support zone but have knowledge the support is a more of a zone area than a sharp line..
I use short term analysis to compliment my Medium/long term charting..Timing and risk control is buying near supports and not buying near resistances.. When I see a major support that I think will hold e.g Bull Market Correction a short term (secondary or tertiary) down trend within a long term (primary) up trend, I check the short term stuff..if the short term shows a reversal I buy with in strict stop/loss controls..
I also use the short term chart if I'm going to buy a stock today...If the stock shows weakness I hold off buying until later in the day..or tomorrow.. by using the short term chart I often pick up that stock a few cents cheaper (saving me several hundreds of Dollars)..

Why did I not buy AIR at 1.79/1.80?...In hindsight seeing it at 1.85 it seems I missed an opportunity..however I have my discipline rules..AIR is in a primary down trend..AIR has a high Beta Coefficient value (as do other cyclicals)..the two together heightens the risk of sudden drops, after sudden rises therefore any tertiary rally (as seen today on a short term chart above) contains more risk of ending ones investment..caught up in a stop/loss whipsaw..That risk/reward is presently above my discipline guidelines..

A primary uptrend together with a high Beta Coefficent value makes a excellent two edged sword combo giving most cyclical stocks a fantastic quick profit investment to its investors ...sadly AIR is not in a primary uptrend.

Note: As most of us are medium to long term investors..the above very basic short term TA chart should be used only as a quick/sensitive indicator tool (do not rely one one tool only).. only gives the investor a better insight to buy into their favourite stock nearer the bottom of a weakness.
Relying on only short term stuff may offer a much higher reward but it comes at a cost of a much higher risk in doing so...an investor is more prone to being whipsawed to bits.....Analysis shows medium term activity (lesser reward/lesser risk) is more profitable overall than short or long term activity).....Short term stuff is best left to the higher frequency traders with better charting programs using real time data streams..

Daily default indicators (medium term) within the daily charts are commonly illustrated on ST.. AIR's rally to $1.85 has not fired those buy signals yet...

[Zouga]

Hi all
AIR is fascinating and although a good one to learn on I am looking for an entry point to top up my SUM. I follow KW's
simple easy to follow guidelines and have stayed out while the share price has fallen. I need to keep waiting as the share price hadn't even fallen below the 50 day MA let alone started to turn back up, but my finger is itching on the trigger as the price casually inches lower. I wonder what others think regarding a good time to top up? My experience with aAIR and hype has taught me to WAIT! But that share price will need to rise quite a way yet before I gain back the cost of that lesson.

[Hoop]

Hi all
AIR is fascinating and although a good one to learn on I am looking for an entry point to top up my SUM. I follow KW's
simple easy to follow guidelines and have stayed out while the share price has fallen. I need to keep waiting as the share price hadn't even fallen below the 50 day MA let alone started to turn back up, but my finger is itching on the trigger as the price casually inches lower. I wonder what others think regarding a good time to top up? My experience with aAIR and hype has taught me to WAIT! But that share price will need to rise quite a way yet before I gain back the cost of that lesson.

I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.

1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).

Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
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.

Hi Zouga
I have added KW's opening post on this thread as her valuable reference to which I think you are modelling off...Am I correct in assuming this?..
If you are following KW's basic model then it tells you not to accumulate SUM at this moment with the price at $5.23...It's tempting I know as SUM is resting on the EMA50 support line (also the MA50 line).. I use EMA50 because it is a little more sensitive than MA50 to recent price changes..But there's not much difference comparing the two on the SUM chart (I have not used MA50 on the chart below)..

I have gone a little crazy with the chart below..It is always a good idea to have a few extra (not too many) indicators to confirm one against the other..therefore when signals suddenly occur, a mass confirmation is a very strong signal that must be acted upon..When a stock such as SUM meanders around on a slow downtrend a TAer applies patience.. discipline!!!...wait for the signs...as you see on the chart below most of the time when the buy signals fire off you have not lost much in opportunity.....as always with TA you lose a little bit of opportunistic profit when opting for a lower risk strategy. KW's Model is close to the maximum return for risk/reward strategy..

I'll let use digest the other indicators I have added....google where necessary or post questions and I will answer them.

SUM Status....HOLD, DON"T ACCUMULATE YET............SUM had been in a rising SD channel since listing 5 years ago suffering only one 6 month bear cycle during 2014. Since then SUM has been and still is, in a bull cycle with loose bullish scallop pattern type rises (inverted fish hooks)..These are healthy breathers for a stock after a quick run up (rally). At the moment SUM is in weakness (another breather?) short term downtrend with a hint of a bottoming (not reliable)..watch for a MA50 break it can and often happens during a bull cycle correction (breather)..SUM's recent behaviour has seen respect for the MA50 line..If the MA50 breaks it should be observed as a caution sign, it is not the end of the world as often these are nothing more sinister than extended breathers after a hard run up...
One charting observation which should be regarded as a caution is SUM has had an unusual change in its behaviour ..since March 2016 it's behaviour has become more votatile ...Even though SUM has altered its behaviour it is still showing TAer's with much respect..It is a well behaved TA stock.

[Baa_Baa]

@skid, ref your post on AIR thread re TA supports. Hoop nailed it with his chart 26 August. Tips hat in Hoops direction.

Hmmm...I wonder how many other less experienced investors have had there fingers burn't on this downtrending stock by getting sucked in with all the hype [snip]

Chart below was drawn on the 26th August [snip]

[Yoda]

Hi Hoop, and all posters,
SUM seems all good to me to buy up just now , what do you think ? Thanks for you previous posts i learn so much from you efforts here,
I am seriously re-evaluating my strategies after WYN. I came away with a profit But learnt a lot too.
SUM has turned a corner i think , or too soon yet? Great company i think , good P/E just now, EPS climbing up annually RSI turning up and MACD too.

[Yoda]

Oh well, SP just answered my question i think , should have bought yesterday !,,!

[Joshuatree]

Need to keep reminding myself

I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.

1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).

Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
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.

[Hoop]

...............

Un-adjusted charts can have all sorts of patterns, some show caution which can be masked on adjusted charts...............

So do you adjust charts for dividends etc?.....answer, yes, no,.... maybe

Chart below was drawn on the 26th August and sent to 3 ST members who PMed me confirming if my charts like theirs were triggering a sell signal..my reply was my chart below is saying the announcement drop is probably a short term buy opportunity and the opportunity window is starting to close with DYO analyses disclosure

An update....AIR's share price is behaving nicely and exactly as predicted (so far)...Back in August 2016 I had taken a view that AIR's shareprice (unadjusted) has topped out and most common topped out behavioural pattern is a H&R pattern so with a better than a 50% - 50% chance of a H&S pattern forming an chartistist can begin operating an odds on investment play by buying AIR (less risky when the $1.80 support [the neck] is confirmed)..The idea is to keep to the investment plan until AIR's behavioural habits change course away from its predicted course (red dotted line).. until then AIR continues to be an accumulation/hold..Note however that AIR is now halfway up the imaginary right hand shoulder of the on going formation of a possible Head and Shoulder pattern so assuming the more common symmetrical version of the H&R pattern (Right shoulder formation mirrors the left shoulder) accumulating more AIR should now begin to be curtailed back as risk is becoming higher than the reward...Once AIR reaches 2.20 - 2.30 area it's decision time whether to realise the 20% capital gain or watch for a bullish behavioural deviation away from the predicted path (red dotted line) (buy signal) or wait for the TA sell signals and give some capital gains back to the market.

Note on the updated overlay the steep drop as predicted (red dotted line), when using an unadjusted price chart some predictions are 100% certain (e.g 35c drop being the announced dividend + Special)