Mastering Charts

Historical studies have shown that chart patterns are consistently repeated over time. Mastering the art of recognizing specific patterns is key to growth investing.

Facebook in 2013 and AAXN, CHGG and TWLO

Ajay Jani mentioned on Twitter it may be worthwhile to revisit Facebook’s move back in 2013 and compare with stocks over the past couple of weeks that have had similar gains in price and volume. The goal is to gain insight into how Facebook progressed after its big move up. Maybe this will foretell how stocks with similar price and volume signatures may play out in the coming weeks.

To begin, we’ll look at two charts of Facebook, paying attention to the price, volume and its upward trend. We’ll follow this with a look at three stocks, AAXN, CHGG and TWLO.

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Power Trend and How to Spot it on a Chart

In this week’s Stock Market Update, Mike Webster pointed out that the Nasdaq is now in a Power Trend. In this post we’ll look at what characteristics make up a Power Trend and we’ll also dive into three examples, two from dates in the past as well as the specifics of the current Power Trend.

Here are the primary considerations for a market to be considered in a Power Trend.

  1. Low above the 21-day for 10 consecutive days
  2. 21-day above the 50-day for five days
  3. 50-day in an uptrend

Once the 21-day crosses below the 50-day that is a sign the trend may be coming to an end. Mike also mentioned there are “circuit-breaker rules” that can end a PT before the 21-day to 50-day crossover.

It should be noted, I am using the Nasdaq for all the charts that follow.

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Weekend Stock Market Update – Visual Reference

I created the following two charts you can use as a visual reference for @mwebster1971‘s Weekend Stock Market Update for the week of 4/27/2020.

The first image highlights the daily and weekly action on the Nasdaq. The second chart shows the 5-minute activity for each day of the week. You can follow the discussion on Twitter at the bottom of the post.

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Weekend Stock Market Update – Visual Reference

Following are several charts you can use as a visual reference for @mwebster1971‘s Weekend Stock Market Update for the week of 4/20/2020.

The first chart is the 30,000 foot view of the week’s action. The second chart shows the technical action more in detail. You can follow the discussion on Twitter at the bottom of the post.

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Weekend Stock Market Update on a Chart – Week of 04/13/20

I’ve created the following two charts to accompany Mike Webster’s Weekend Stock Market Update: Coronavirus Bull Market Powers Higher, which is published weekly on Investors.com.

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2020 Nasdaq Correction Versus 1998

Following is a visual summary I created based on Mike Webster’s discussion on Investors.com IBDLive, highlighting the similarities of the 1998 Nasdaq market correction and today’s market.

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IBD Stock Market Update on a Chart – Week of 04/06/20

Below are two graphics to accompany Mike Webster’s IBD Weekend Stock Market Update: Tom Petty’s ‘Won’t Back Down’ FTD. The focus of the charts is to highlight the technical action throughout the week.

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