Technical Analysis

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

What is a Vertical Violation?

Given the sharp correction in the Nasdaq over the past two days, this post seems timely…

Based on his own research and market analysis, Chris Gessel noticed something unique about a specific type of market correction. After further study with Justin Nielsen, they found that a significant break of the 50-day and/or 200-day moving averages often lead to a period of under performance, which could include a continued decline, an extended period of volatility and/or failed follow through days.

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Swing Trade Setup in a Cup with Handle

I want to share with you a swing trade setup that I think you’ll find interesting. Actually, the setup itself is nothing out of the ordinary as far as a swing trade goes, it’s where the setup occurs that makes for something intriguing. Let me explain…

A common swing trade setup is to buy on an upside reversal, often after a stock has pulled back to a moving average or another point of support. What I’d like to point out is if you see an upside reversal in the handle of a cup with handle pattern, you may have an opportunity to ride the stock higher with any momentum generated by a move through the pivot.

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Alternate Entry: Shakeout + 3

The following image walks through two examples of how to determine an entry price for a stock purchase using Shakeout + 3.

Power Trends Charted on Nasdaq and S&P 500

Mike Webster and Irusha Peiris recently discussed power trends on the Investing with IBD Podcast. Ajay Jani took the time to code the concept in an Excel document which shows power trends for both the Nasdaq and S&P.

The orange indicator in the charts that follow, highlights where the power trend is on. The Nasdaq chart goes back to 1984 and the S&P 500 back to 1962. Richard Moglen helped Ajay with data acquisition.

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Buying Stock on Pullback and Upside Reversal

I recently used a pullback followed by an upside reversal to buy shares in two stocks. One of the buys was within a base, which I used as an early entry. The second was a buy to add to an existing position.

It’s worth noting, I am not recommending either stock. My intention is to show how I used a pullback and reversal for two past trades.

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