Registered User
Joined: 12/5/2004
Posts: 49
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I wrote last week about Micron Technology ( MU ) and was surprised I never got any comments on it. I actually bot it last Thursday @ 13.76 & then sold it Wednesday @ 15.15.
The reason I was willimg to buy it on Thursday in the middle of a nose dive was because I used a pattern. Now whether or not it was the pattern that caught the falling knife or just the market saving it, is not important. The key is by using a pattern I had a plan! By plan I mean I knew in my mind when I wanted to buy and when ( if need be ) I was going to bail out. I originally had an upside goal of 16 but since I caught a nice bounce in a short time I went ahead & sold. Will I get back in if it starts to test the down trend line again I do not know, but if I do, I will do it with confidence because I will have a sale point in mind befroe I jump in.
I like to follow the DOW 30 stocks. I am not the smartest guy in the world so I try and keep things as simple as possible, and by following a small number of stocks I can stay a little more familiar with them.
This week I am looking at ( AA ). I know everyone is saying the metals are not the place to be right now & I agree with them. But ( AA ) might be in an Inverted Head & Shoulder Pattern here.
I am using the August low ( on a bar chart & a line chart ) as my weak side shoulder, so I have an idea. Right or wrong, agree or disagree, it really does not matter. I have a plan because the pattern I see is telling me what my plan is.
Even though I am using a pattern I am also using the indicators to help me decide if the pattern is worth looking at and I believe they are.
I see ( TSV ) is stronger on this side of the Head. I see ( BOP ) is positive on this side of the Head. I see ( OBV ) is stronger on this side of the Head.
( AA ) is still showing some weakness & this is a pattern where I like to see strength, before I enter. For some reason it has closed below its 20 day which I do not like, but it is still above its 50 day. Friday ( AA ) just made a new low for November which is a negative. If I would have been on my toes Friday I might have tried to enter on the test of the August low knowing my sale point was right at hand, but now I will view anything below the 50 day as weakness and probably trouble.
Mike
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Registered User
Joined: 3/21/2006
Posts: 4,308
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You should stick with (MU), it is in a long term up trend as apposed to AA which is in a long term down trend.
MU has a history of similar price movments, go back to Mid July and see how similar that looks to what you see now, only now the TSV is a bit higher. You should get another buying opertunity next week some time.
AA You will see some mild success with this but it still has some work to do
These are just my observations, and not meant to be anything else. Good luck....
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Registered User
Joined: 1/12/2006
Posts: 296
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In my use of common indicators, AA reveals three (3) obvious buy points in the last 1 1/2 years: 10/05, 03/06, and 06/06. They all contain specific indicator constraints that I prefer, including a recent downtrend. Since I use common technical indicators (non-Worden), I suggest going back to these time frames and analyze with your setup methods - could be revealing to you.
AA currently does not meet my setup pattern for intermediate range trading, but, for short-term, I do like the 11/17 activity: It gapped to it's low at the open and closed very near it's high of the day. Some prefer to wait for a confirmation prior to the buy.This cost me about an hour!!!
Hope this helps
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Registered User
Joined: 12/19/2004
Posts: 457
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I can understand why you might think AA is at some sort of near term bottom. My indicators on the daily show a positive divergence at the October low, and a selling climax at the October low. From there we had some sort of rally.
However, the weekly charts indicate that AA is at a point of potential resistance, with the odds favoring a continuation of the downtrend.
Despite the strength in the market, AA and similar stocks have underperformed the DJ-30. Given the current environment, I don't see any reason to believe money managers are going to be chasing after stocks like AA.
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Registered User
Joined: 3/21/2006
Posts: 4,308
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Not to step on any toes but, I hope that you can see that there is resistance at $29 & $30 Is one or 2 points a worthy risk?
Again good luck..
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Registered User
Joined: 8/12/2006
Posts: 83
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It seems to be following a bearish Converging Triangle pattern.
Top Edge: May High & Nov Highs
Bottom Edge: Jun, Aug, Sep & Oct Low's
There is a good probability, it will touch the 25 mark.
Again, this is my personal viewpoint.
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Registered User
Joined: 8/12/2006
Posts: 83
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Stock was following a multi year channel pattern...
Channel Top line thru: 03/01/04, 08/15/05
Chaneel Bottom line thru : 05/03/04 , 10/10/05
Channel resistance was broken on 12/19/05 and went on a good run...
Bearish Triangle pattern, I mentioned earlier:
Top Edge: May High & Nov Highs
Bottom Edge: Jun, Aug, Sep & Oct Low's
will be converging with top channel line around $23-$24 area.
In all probability, there will be one more slide and the stock may turn bullish...
This is a definitely a stock to watch which will unravel in the next 1-3 weeks.
Guys, Can you comment on my analysis...
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Registered User
Joined: 12/5/2004
Posts: 49
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I started my first thread by saying I do not participate much because a lot of technical trading is what the individual see's, feels ect. You might see a no brainer and for some reason I do not see it, or verse visa.
I like to look for patterns. When I see one I like, I try and participate. Picking an entry point and exit point are easier for me when I trade a pattern.
With ( AA ) I wish I would have caught the test of the August low, but I never so I had to settle for the November high. Tuesday ( AA ) traded above 29.18 and ran directly up to 29.30 and then fell back and I got in at 29.16. I was hoping it would fall back to the 29.04 mark witch was Monday's high but it never and I was just lucky I had the nerve to buy Tuesday afternoon at the 29.16 mark.
I sold today at the 30.36 mark because I will not be available Friday and did not want to hold a large position over the weekend. ( AA ) still has room to run here, so I probably will regret the sale, but who cares because it was a good trade for me.
I am probaly the only one who participated that read the original thread. Why? Because at times it is hard to see what somebody else is seeing.
Same way with ( MU ) I made gooooood money on ( MU ). Did I see a pattern or was I lucky, or maybe both?
My point is: Find your stocks and trust yourself. Keep it as simple as you can. Set good buy points and good sale points and let the chips fall where they may, and at the end of the day I think you will find you have had fun and made money and feel good about yourself.
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Registered User
Joined: 12/5/2004
Posts: 49
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Cup & Handle
( LEH ) looks as if it might be in a Cup & Handle pattern. The Cup part is approximately 6 months in duration so the Handle could last up to 6 months, but does not have to.
These patterns can be very rewarding.
The safest way is to play the breakout.
A stock to keep an eye on.
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Registered User
Joined: 9/22/2005
Posts: 849
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I see a rounding bottom beginning in August and ending on Nov 8. It bottoms at 26.39 on Oct 11. It’s depth is 28.86 - 26.39 = 2.47. This results in a predicted close of 31.33. It closed on 12/5 at 30.84. There is resistance at 33.50.
Assuming an entry at 30.84 and selling at 33.50 there would be a profit of 2.66 per share (8.6%). A good to place a stop is just below the low on 11/29. With a stop set at 30.19, the risk is 0.65. The reward/risk is 4.1/1.
On a 100 share position the profit would be $266.00 with a risk of $65.00. This does not take commissions into account. With a round trip cost of $12.00, the profit would reduced to $254.00 and the reward/risk would be 3.9.
At the present rate of increase it should reach the target in 22 days. (Christmas to Near Year.)
We’ll see what happens.
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Registered User
Joined: 12/5/2004
Posts: 49
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I am looking at Lehman Brothers Holdings ticker symbol ( LEH ). Closed yesterday at 75.38.
Sorry for any confusion.
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Registered User
Joined: 9/22/2005
Posts: 849
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My comment was relative to AA.
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Registered User
Joined: 12/5/2004
Posts: 49
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( SPLS ) is in a daily Cup & Handle pattern that is on top of a weekly Cup & Handle.
A very strong pattern.
The safe way to play is to wait for the breakout.
Safe is not always the best way. I can't see this stock closing below the 200 day anytime soon.
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Registered User
Joined: 1/29/2005
Posts: 104
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I have been tracking PLUG and it is in a descending triangle. It has touched support 4 times since Aug and may be breaking down through support today.
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Registered User
Joined: 12/5/2004
Posts: 49
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Usually this is a continuation pattern and it seems to be playing out to be just that here.
If you already own it I would go ahead and hold it until it breaks 3.50.
If I did not own it I would not buy it.
There is an ole saying.
You ain't seen cheap yet.
If ( PLUG ) breaks 3.50 it just might get cheap. I mean real cheap.
But I have to admit I do not follow this stock, anymore.
I remember when it first came out. John Markman was the first to talk it up and it had a heck of a run and then fell just as quick. I think they were into the hydrogen fuel cell dream. I do not know what they are into now.
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